Businesses choose different channels for selling their products and services to their customers. It can either involve the direct distribution or indirect distribution through different intermediaries like wholesalers, retailers, etc. You have to choose a distribution channel based on the nature of your products and services.
Many businesses choose direct distribution for selling their products to their customers. Here, the producer will be directly distributing the goods to the consumers without the involvement of any intermediaries. Choosing direct distribution companies can provide you a lot of benefits. But it has some drawbacks too. We share some of the advantages and disadvantages of direct distribution channels for your knowledge. This can be beneficial for you when deciding your company distribution channels.
Pros Of Direct Distribution
The following are some of the important benefits of direct distribution channels:
- Direct channels will be owned by the manufacturer/producer itself. Therefore, it can provide them complete control over the channel. Here, the company will be able to maintain consistency in the service they provide. Also, it can control the hiring and training of employees thereby developing different skills in them that can be beneficial for the company.
- Here, the skilled professionals or workers of the company will be able to create an individual relationship with their customers. It can be helpful for the company to create loyal customers which can be a great asset.
- Direct distribution channels can be useful for products that are highly perishable and products that have a very high value. Also, it can be applicable to different service providers like doctors, consultants, dry cleaners, etc.
- Companies will be able to get direct feedback from the customers, which can be useful for improving their products and services based on the requirements of the customers.
Cons Of Direct Distribution
Some of the common drawbacks associated with direct distribution are mentioned below:
- Here, the company will have to bear all the financial risks. They will have to handle the storage of products, marketing, advertising, transportation, customer service, etc.
- When selling a product or service, the company should have good knowledge of the local market, which can be a difficult task. When choosing an indirect distribution, wholesalers and retailers will be aware of the trends in the local market. But in the case of direct distribution, the company will have to acquire enough knowledge about the local market which can become a difficult task for them when expanding their business to new places.
Direct distribution has its own benefits and drawbacks. Hence, you have to consider them for knowing whether direct distribution companies can be suitable for your business.