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Dsitribution Channel

In: Business and Management

Submitted By kay08
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| | | Major Channels of Product Distribution | | In China's distribution sector, the coverage of its vertical wholesaling system is extensive with wholesalers reaching out to a large number of widely dispersed rural markets at county level and below where the distribution system is undeveloped, meeting the enormous consumption needs of markets at the lower end. On the other hand, the coverage of China's horizontal retailing system is relatively narrow and retailers tend to concentrate in markets at different levels. The major types of distribution channels in the mainland are: 1. Manufacturer → wholesaler → retailer → consumer. This is the traditional channel. 2. Manufacturer → trade fair or exhibition → commercial enterprise (wholesale or retail) → consumer. 3. Manufacturer → commercial enterprise (wholesale or retail) → consumer. This type of distribution channel is known as direct purchase, i.e. a commercial enterprise purchases the goods directly from a manufacturer. As this channel involves fewer intermediaries and thus saves costs, it has developed rapidly. 4. Manufacturer → wholesale mart → commercial enterprise (wholesale or retail) → consumer. Goods such as clothing, footwear and small home electrical appliances are primarily channelled through wholesale marts. 5. Manufacturer → agent → retailer → consumer. This flexible channel is also growing very fast. 6. Manufacturer → distribution centre → retailer → consumer. This channel is particularly well suited to the development needs of commercial chain operations, convenience stores and supermarkets. 7. Manufacturer → consumer. Also known as direct sales, this channel does not involve any intermediaries. The manufacturer sells its products to end consumers directly or through intermediaries such as mail order and TV shopping. In the latter case, certain fees are added to the ex-factory...

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