Direct and Indirect Distribution Channels

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Direct and Indirect Distribution Channels

There are two types of distributions channels: indirect, which includes a chain of producer, wholesaler, retailer, and customer (sometimes without a wholesaler), and direct, which cuts of the intermediaries. Recently, I have purchased a portable fan via Amazon due to the high temperature in our house. My parents wanted the one too, but they did not want to use the internet and went to the electronics store to buy it from the retailer. The cost of their portable fan was higher by 15% despite the fact that we bought completely identical models.

Since I have purchased the product directly from the manufacturer, the type of distribution channel I have used was direct, which is the shortest type of distribution. My parents bought the fan from the retailer, who is, in turn, received it from the wholesaler, who purchased it from the manufacturer. Their type of distribution channel is defined as indirect distribution, which is characterized by having multiple intermediaries between the consumer and the manufacturer.

Comparing the two types of distributions, one can point out several advantages and disadvantages. I prefer a direct distribution channel due to the lower costs because the manufacturer does not have additional expenses attributed to intermediaries. Ordering via the internet might be longer than buying a product at the store; however, it depends on whether a customer spends time looking for the specific product at the physical stores. My parents had the advantage of knowing the place where they could buy a portable fan. Despite the increased costs, the indirect distribution channel has a better shipping quality. A manufacturing company is not an expert in shipping; therefore, there is an increased risk of purchasing a product with a defect.

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