Distribution channels: definition
A distribution channel is the path followed in the process of selling a product from the manufacturer to the industrial user or end consumer.
They are often classified according to a clear typology based on the complexity of the distribution channels.
List of different distribution channels
Distribution channels are often differentiated according to their complexity and whether or not intermediaries are involved.
Since the distribution channel links the producer of the goods or services and its end consumer, the shortest possible distribution channel is the direct sale between the producer and the consumer.
On-farm sales for fresh produce would be a clear example. E-commerce or sales by a company’s own sales teams are also considered to be part of the most direct distribution channels.
Short distribution channel
A short channel relies on an intermediary. Whether a retailer or a distributor, this intermediary in the distribution channel is positioned between the producer and the end consumer.
Long distribution channel
A long circuit always relies on a complementary step: a wholesaler or a central purchasing office. This means there are at least two intermediaries between the producer and the end consumer.
How to choose the right distribution channel?
Based on these different distribution options, a company must define the distribution channel which best suits its strategy. This can be based on financial considerations, brand image considerations, etc.
For instance, some brands want to keep control over their distribution channels and keep sales as direct as possible. This gives consumers the impression of being part of an insider club, a happy few.
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