Unit 3.1: Marketing | Place

A channel of distribution is the means by which a product is passed from the place of production to the customer or retailer. There are 3 main types of channel of distribution:

MANUFACTURER - CONSUMER (e.g. agricultural products sold directly from the farm)
It’s the fastest channel, and often the cheapest for the consumer. But it can be more difficult for consumers to shop around, and customer service levels may be not as good. This is often the case of products like bread.

MANUFACTURER - RETAILER - CONSUMER (e.g. supermarkets)
It’s faster than dealing with retailers through wholesales, and the manufacturer gets a better consumer feedback about the products.

MANUFACTURER - WHOLESALER - RETAILER - CONSUMER (e.g. clothes)
The wholesaler performs the function breaking-bulk; which basically means that they buy products from manufacturers in large quantities, and then divide up the stock into much smaller quantities for retailers to buy.