Distribution is the process of making a product or service
available to consumers by using direct or indirect means, by
taking it from the point of production
(producer/manufacturer) and bringing it to the point of sale
example, coffee comes from the farmer, to the exporter, to
the importer, to a distributor and then to the retailer.
So the next time you go to
starbucks ask yourself, how did the coffee get there?
retail outlets obtain their supplies through distribution
Rearly do they prefer to
work with producers/manufacturers to get items in their
They will only work with
their authorized distributors to get items on their shelves
Distribution channels are made up of independent
organizations (intemediaries) such as Resellers, Wholesalers
(also known as Distributors or Wholesale Distributors,
Suppliers or Wholesale Merchants), Agents and Brokers.
distribution channel with the least amount of intermediaries
will enable you to earn more.
A distribution channel
with more intermediaries will add more to the final retail
price of the product at the point of sale thus making your
product too highly priced to sell well.
Each intermediary in the
distriution channel markup the price of the product in order
to get their piece of the pie. Some can go as high as
35%. So, you have to
set the retail price
of your product with that factor taken into consideration.
There are two types of Distribution