Channel Relay

Effective Distribution Channels That Affect Product Affordability

Businesses operating in a product oriented market often vary in their distribution channels to suit their customers’ needs. This is due to frequent changes in the market trends and the economic implications.

Usually, businesses will go for the least expensive distribution channels since the goods going through these kind of structures will also be affordable, increasing the demand for such goods. The other option is to sell directly to customers and avoid middlemen.

Direct selling is necessary for a business that would like to get immediate feedback from its customers; this will ensure healthy customer relation. Sometimes, handling of goods involves various technicalities which need to be relayed directly to the consumers. The manufacturer is therefore called upon to educate and facilitate the passage of correct information. Examples of products that need to be directly passed to the consumers are perishable goods.

A longer distribution channel may be used for durable goods as they take a longer period before they expire, if at all they do. If the market for a product is unpredictable, the producer may opt to sell through middlemen who will share the risks involved as opposed to a producer shouldering all the risks.

Middlemen offer their services for a fee which is added to the final price. If a distribution channel has many middlemen, then the final price paid by the consumer for the commodity will be high.

The government should also put checks on the use of certain distribution channels, especially where middlemen seem to exploit consumers. As much as middlemen increase the price of a commodity, they do offer the advantage of storing and delivering goods to consumers thus freeing the distributor from some of the tasks.

About the Author

Belsheba is a business management expert. She researches and studies on big and small business strategies. Website: Business Management Solutions for efficient business operation.

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