Distribution (Place)

Last updated Jan 12, 2023 Edit

• Business

Distribution is the process of getting a product from the producer to the consumer.

Main objective of distribution

To make products avaliable in the right place at the right time in the right quantities.

A distribution channel moves a product through the stages from production to final consumption.

Each party in a distribution channel is called an intermediary.

• Break bulk
• Buy large volumes of products at a low price and resell smaller quantities at a slightly higher (but still cheaper than the market) price
• Retailers can order smaller amounts of product from wholesalers.
• A wholesaler makes money by buying at a lower price from the producer and adding their profit margin onto the price paid by the retailer.

• Specialist type of distributor
• Does not hold stock
• Tend to operate in the tertiary sector (services)
  • Travel
  • Insurance
  • Publishing
• Earn a commission based on sales achieved

• Direct Distribution
  • Channel where a producer and consumer deal directly with each other without the involvement of an intermediary
• Indirect Distribution
  • Involves the use of intermediaries between the producer and consumer

• Nature of the product
  • Perishable/fragile
  • Technical/complex
  • Type of product
  • Desired image for the product

Business