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CHANNELS OF DISTRIBUTION

CHANNELS OF DISTRIBUTION. Channel Members. Producers and manufacturers Creating Growing Producing Changing. Channel Members. Intermediaries (middlemen) Move products from the manufacturer to the final user Reduce number of contacts needed to reach the consumer Merchant intermediaries

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CHANNELS OF DISTRIBUTION

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  1. CHANNELS OF DISTRIBUTION

  2. Channel Members • Producers and manufacturers • Creating • Growing • Producing • Changing

  3. Channel Members • Intermediaries (middlemen) • Move products from the manufacturer to the final user • Reduce number of contacts needed to reach the consumer • Merchant intermediaries • Take title, then resell • Agents • Bring buyer and seller together

  4. Merchant Intermediaries • Wholesalers • Buy large quantities • Store goods • Resell to other businesses (retailers) • AKA distributors • Rack jobbers • Drop shippers

  5. Merchant Intermediaries • Retailers • Sells to the final consumer for personal use • Brick-and-mortar retailers • Automatic retailing • Direct mail • Catalog retailing • TV home shopping • E-tailing www.amazon.com

  6. Channel Members • Intermediaries (middlemen) • Move products from the manufacturer to the final user • Reduce number of contacts needed to reach the consumer • Merchant intermediaries • Take title, then resell • Agents • Bring buyer and seller together

  7. Agents • Independent manufacturers’ representative • Work continually with related, noncompeting manufacturers • Not on manufacturer’s payroll • Paid by commission • Brokers • No continued relationship with parties • Negotiate sale • Paid commission • Food Brokers • Specialized type of broker

  8. Direct vs. Indirect Distribution • Direct distribution • Goods/services sold directly to customer • No intermediaries used • Indirect distribution • Goods/services sold or negotiated through an intermediary

  9. Manufacturer/Producer A B C D E Agents Wholesalers Retailers Consumers

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