Distributing products involves physically making them available to customers when they are needed.
Distribution is the natural offshoot of production; it’s the function that gets the manufactured product into the hands of those who need it.
The chain of events and functions responsible for transferring goods and services from the manufacturer to customers is called the distribution channel.
Key components of a distribution channel
Logistics
- Logistics: the process of taking manufactured products from the production plant to the point of sale
- Packaging: physically containing each product in prepared packaging
- Storage: keeping the products in specific locations before transportation
- Picking: selecting specific products to load as a consignment for transporting
- Transportation: conveying products between physical locations to process throughout the delivery channel
- Delivery: arrival of products at their final destination for sale
- Inventory management: stocking of products in preparation for being sold
- Point of sale: the location where products exchange hands into the possession of the customer
Partners
- Partners: individuals and organisations involved in managing the distribution channel.
- Stockists: designated people or organisations that are known by customers for holding the products
- Retailers: individuals or organisations that sell the product
- Distributors: these individuals or companies act as wholesalers or larger volume (lower margin) sellers
- Agent: individuals or companies who provide access to acquiring the product, but don’t typically hold stock…more dealmakers, that sellers.