UNIT VII TRADE Commerce - - . . PM According to American Marketing Association , “A channel of distribution is the structure of intra company organization units and extra company agents and deals wholesale and retail through which a commodity or product or service is marketed”. ii.
Mail - Order Business or Phone Order Business The manufacturer collects orders from the consumers through post or mail or phone and delivers the products themselves. Some producers send the catalog of their products directly to the consumers and receive orders over post or phone. Then they distribute goods to the demanding consumers. iii.
E-Commerce This is also a direct channel where there is no middleman. A website is created by the producer and through internet the product order is received and delivery of goods is made from the nearest godown of the producer. iv. Direct Marketing or Multi-Level Marketing The manufacturer establishes branches all over the country or in other countries also.
The producer first enrolls few consumers. These consumers are asked to bring in more consumers. Various commissions are paid to the senior and junior consumers according to their turnover. All consumers directly purchase from the producer’s branches.
. Types of Channel of Distribution The types of chennel of distribution are as follows; I. Channels based on the middlemen. II.
Channels based on the type of goods and services III. Channels based on national and international markets I. Channels based on the middlemen A. Direct Channel i.
No middlemen The producer takes up the task of distributing the goods either through his own company showrooms or branches or through his sales team. Producer himself exercises direct control over thr distribution.Some producers sell goods right from the doors of their factory directly to the consumers. Commerce - - . .
PM B. Indirect Channel or Distribution Through Middlemen i. Contract Distributors or Contract Logistics The large scale producer outsources the warehousing, transporting and distribution functions to a third party on contract. The contractor may process orders, collect payments and carry out customer service also.
He is paid commission on the