Channels of Distribution — Chapter Summary

A channel of distribution is

A channel of distribution is the route or path along which goods move from producers to ultimate consumers. It shows how goods travel from the place o

In a direct channel

In a direct channel, there is no middleman between producer and consumer. Producers may sell through door-to-door salesmen or their own retail stores.

In an indirect channel

In an indirect channel, goods pass through one or more middlemen such as agents, wholesalers, or retailers before reaching consumers.

Agents

Agents, wholesalers, and retailers are called middlemen because they connect producers with consumers and help goods move through the market.

A wholesaler buys goods in large

A wholesaler buys goods in large quantities from producers and sells them in smaller quantities to retailers, and sometimes directly to consumers in l