Distribution channel

A distribution channel is a path that a good or service follows from production or manufacturing to the final consumer/buyer. Conversely, it also describes the pathway payments make from the end consumer to the original vendor. Distribution channels are important to businesses as they allow for the smooth delivery of goods or services to a customer.

A distribution channel represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. A distribution channel can also provide a sense of how money flows back from the buyers to the producer or original point of sale.

The route can be as short as a direct interaction between the company and the customer or can include several interconnected intermediaries like wholesalers, distributors, retailers, etc.

Distribution channel have direct impact over sales. There are many types, formats, and levels of distribution channels.

Distribution channels vary but typically include a producer, a wholesaler, a retailer, and the end buyer/consumer.

There are three ways to make sure a product gets to the final consumer: Direct channel, indirect channel, hybrid channel. Which distribution channel(s) a business uses will be based on overall business goals and structure.
Distribution channel