What are Channels of Distribution?

In the Business Buying Behavior Tutorial, we describe a supply chain as consisting of all parties and activities that help a marketer create and deliver products to the final customer. For marketers, the distribution decision is primarily concerned with the supply chain’s front-end or channels of distribution that are designed to move the product (goods or services) from the hands of the company to the hands of the customer. Obviously when we talk about intangible services the use of the word “hands” is a figurative way to describe the exchange that takes place. But the idea is the same as with tangible goods. All activities and organizations helping with the exchange are part of the marketer’s channels of distribution.

Channel of Distribution Activities

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As described below, activities involved in the channel are wide and varied. A while some marketers may choose to handle all distribution activities on their own, most marketers find many of these tasks are best left to others. Whether handled by the marketer or contracted to others, these activities are crucial when structuring a cost-effective and efficient distribution system.