Four Types of Marketing Channels ~ Biz.com Small Business

By Lanee' Blunt

The route that the product takes on its way from production to the consumer is important because a marketer must decide which route or channel is best for his particular product. Marketing channels are the ways that goods and services are made available for use by the consumers. All goods go through channels of distribution and your marketing will depend on the way your goods are distributed.

Manufacturer to Customer

Manufacturer makes the goods sells to the consumer directly with no intermediary, such as a wholesaler, agent or retailer. Goods come from the manufacturer to the user without an intermediary. For example, a farmer may sell some produce directly to customers. For example, a bakery may sell cakes and pies directly to customers.

Manufacturer to Retailer to Consumer

Purchases are made by the retailer from the manufacturer then the retailer then sells the merchandise to the consumer. This channel is used by manufactures that specialize in producing shopping goods. For example, clothes, shoes, furniture and fine china. This merchandise may not be needed immediately and the consumer may take her time and try on the items before making a buying decision. Manufactures that specialize in producing shopping goods prefer this method of distribution.

Manufacturer to Wholesaler to Customer

Consumer’s can buy directly from wholesaler. The wholesaler breaks down bulk packages for resale to the consumer. The wholesaler reduces some of the cost to the consumer such as service cost or sales force cost which to the consumer. For example, shopping at some of the warehouse clubs, the customer may have to buy a membership then the customer can buy directly from the wholesaler.

Manufacturer to Agent to Wholesaler to Retailer to Customer

Distribution that involves more than one intermediary an agent is called in to be the middleman and assist with the sale of the goods. An agent receives a commission from the producer. Agents are useful when goods need to move quickly into the market soon after the order is placed. For example, a fishery makes a large catch of seafood; since fish is perishable it must be disposed of quickly. It is time consuming for the fishery to contact many wholesalers all over the country so he contacts an agent. The agent distributes the fish to the wholesalers. The wholesalers sell to retailers and then retailers sell to consumers.

Reference:

Business Education: Types of Marketing Channels

Marketing Teacher: Place Distribution Channel or Intermediary