Distribution

Channel of Distribution

The path a product takes from its producer or manufacturer to the final user.

Wholesalers

Businesses that buy large quantities of goods from manufacturers, store the goods, and then resell them to other businesses.

Retailers

Sell goods to the final consumer for personal use.

Direct Distribution

When the producer sells goods or services directly to the customer, with no intermediaries.

Indirect Distribution

Involves one or more intermediaries.

Physical Distribution

Comprises all the activities that help to ensure that the right amount of product is delivered to the right place at the right time.

Inventory

Amount of goods stored.

Storage

The holding of goods until they are sold.

Steps in stock handling process

Receiving goods, checking merchandise, marking merchandise, transferring merchandise.

Blind Check

Receiver counts and records the quantities delivered on a dummy invoice; considered most accurate but time consuming.

Direct Check

Receiver checks merchandise against the original invoice; faster but errors may be introduced.

Spot Check

Random check of one carton in a shipment; used to check supermarket/drugstore deliveries.

Quality Check

Check the workmanship and general characteristics of the merchandise; usually done for products with value.

Universal Product Code (UPC)

Used for source marking; price is marked before delivering the merchandise to the retailer.

Two things found on a price ticket

Price, store numbers, model or style numbers, color, sizes, fabrics, manufacturer’s number, lot numbers.

Trucking

Most frequently used transportation mode.

Railroads

Trains transport nearly 6% of the total intercity ton-mile of freight; move heavy, bulky freight.

Air cargo

Less than 1% of the total ton-miles of freight shipped; high-value, low-weight, time-critical items.

Waterways

Includes inland, intracoastal, and international shipping; transports goods over water.

Pipelines

Used to transport oil and natural gas.