Why do we need distribution channels

They have various contacts, expertise and wider knowledge of the products. The rapidly growing markets and increasing complexities of distribution have increased the demand and requirement of the distribution channels. Distribution channels offer salesmanship: The distribution channels offer pivotal role of a sales agent.

They help in creating new products in market. They specialize in word of mouth selling and promotion of products. They assure pre-sale and post-sale service to the consumers.

Since these channels are in direct and regular contact with the consumers, they do salesmanship very well and at the same time provide true and valuable feedback to the producers.

Distribution channels increase distributional efficiency: The intermediary channels ease the sales process as they are in direct contact with the customers. They narrow down the gap between producers and consumers both ecoomically and efficiently.

These intermediaries reduce the number of transactions involved in making products available from producers to consumers. For instance, there are four producers who are targeting to sell their products to four customers.

It has removed all distance barriers for businesses while performing their operations. Distribution channels have made it possible for businesses to serve customers even at far distant places.

Distribution channel has an efficient role in maintaining sufficient stocks of goods. It helps in maintaining the supply of goods as per the demands in the economy. It avoids all cases of shortage of supply of goods in market. Distribution channel is served as the medium through which business acquire all required information from the market. It helps in formulating strategies according to that. These intermediaries inform the customers about the product. Business gets financial assistance from the distribution channel.

Distribution channels are important to businesses as they allow for the smooth delivery of goods or services to a customer. If a business does not source the best collection of businesses for this purpose, it can lead to unhappy customers and an inadequate provision of services. Creating an efficient process from warehouse to customer can make a huge difference in how customers view your business.

For example, if a business sources goods from a subpar manufacturer customer will receive unsatisfactory products. Or if a wholesaler is unreliable when delivering goods, customers will not receive their products on time. Shorter distribution channels have fewer businesses involved in the process of delivery of goods meaning that there is more risk involved for the companies if products are not sold or delivered as promised.

Therefore some businesses choose a longer distribution channel where less profit is made so that the risk and responsibility are lesser on each individual business. A distribution channel strategy is normally designed by a retailer, or the business selling goods to a customer. This is so that they can source the product they aim to sell, they can reduce costs while making a nice profit themselves, and find the best way to deliver the product to the customer in the shortest time frame possible.