Distribution Channel
Candlefocus EditorDistribution channels can be divided into two main types: physical distribution and virtual distribution. Physical channels include wholesalers, retailers, and distributors and generally involve brick-and-mortar stores and establishments. Virtual distribution, on the other hand, is facilitated through the internet.
Physical distribution involves the storage, and transportation of goods from the producer’s location to the customer’s place. It may also involve additional activities such as packaging, warehousing, order fulfillment, and shipping. This type of distribution involves more investment from the retailer and involves intermediaries to facilitate the distribution process.
Virtual distribution involves the selling of goods and services over the internet. This type of distribution does not require a physical presence, and retailers can offer cheaper prices since they do not have to worry about overhead costs. Moreover, the internet has enabled retailers to reach out to an extremely large customer base.
Distribution channels play an essential role in the economic system, since they allow the products and services to reach the users in a time-efficient and economical manner. Distribution channels are becoming increasingly complex as retailers are seeking to reduce cost and boost profits, while providing customers with a better shopping experience. Thus, it is important for retailers to take into account their distribution channels in order to maximize their profitability.