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Unit 29 Understanding Retailing - P2
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- PEARSON (PEARSON)
Unit 29 Understanding Retailing - P2
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Unit 29 – P2 Kojar AhmedA distribution channel is a chain of businesses or intermediaries throu h which a ood or serviice
passes until it reaches the end consumer. It can include wholesalers retailers distributors and evien
the internet itself. Channels are broken into direct and indirect forms with a "direct" channel
allowin the consumer to buy the ood from the manufacturer and an "indirect" channel allowin
the consumer to buy the ood from a wholesaler or retailer.
Source: htps://www.inviestopedia.com/terms/d/distribution-channel.asp
A distribution channel is the path by which all oods and serviices must traviel to arrivie at the
intended consumer. Distribution channels can be short or lon and depend on the amount of
intermediaries required to delivier a product or serviice. There are also sevieral factors which afect
distribution lines these are time place and quantity. For consumable products such as fruits and
vie etables the amount that can be produced and distributed is heaviily dependent on the time or
season. This is because fruits such as strawberries are best rown in the summer and will not be of
the best quality if rown in the winter. This afects other factors such as the price of the product in
store.
Another factor of distribution channels is place or location. This will dictates how lon it takes for
raw materials to be deliviered or rown. For example if a certain product is needed in one location
but it is not sold there or does not row in that climate then it will havie to be ordered. This means
that the retailer will havie to wait a considerable amount of time until the product is deliviered this
means the business may miss out on a lar e amount of sales. As well as this by moviin the products
from one location to the other there is potential for accidents or mistakes which may make some of
the products unusable as well as costly for the retailer.
Lastly the quantity of the product or its raw materials will havie a dramatic afect on its aviailability
and price. Quantity can be afected by a viariety of factors such as the ones stated abovie. A decrease
in quantity means the retailer will havie to pay its supplier or wholesaler more for the product as it is
harder to make or et. This could be due to a lack of natural resources or raw materials.
Products in a distribution channel can o throu h many diferent channels before they reach the
consumer this will depend on the product itself whether it is bein bou ht from or wholesaler or
whether it is bein deliviered by a supplier. For a product such as fresh bread in a bakery its
distribution channels will heaviily difer from many others this is because it is not bein made by a
manufacturer and is instead bein made in store from raw materials this may mean it is cheaper to
run a bakery than a normal retailer or it may be more difcult if the materials required to make the
bread are not in stock makin the bakery unable to operate properly.
Normally most mass produced products will o throu h a similar distribution channel that is from
the manufacturer to the supplier then to the retailer and fnally to the consumer.
Some smaller retailers who cannot aford a supplier or do not wish to use one will instead opt to
buy their products wholesale. A wholesaler is a person or frm that buys lar e quantity of oods from
viarious producers or viendors warehouses them and resells to retailers. This can be a beter option
for smaller businesses that cannot aford a supplier they will also usually et a discount by buyin
their oods in bulk.
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