A distribution channel business is a chain of businesses through which the goods reach the consumer. Since the advent of the internet and online shopping, the need for distribution channels has increased. Every type of business model has to sell its products to customers and without a distribution channel, it is not possible.
Direct distribution channels and indirect distribution channels are the two types of distribution channels. As the name suggests the direct distribution channel allows the manufacturers to sell their products directly to the customers. On the other hand, a retailer or a wholesaler is there to distribute the product or service to the customer in the indirect distribution channel.
What Is Direct Distribution Channel?
This type of distribution channel gives the company direct control over the consumer process. This is both beneficial for the consumer and the company because it helps in the direct interaction between the manufacturer and customer. There won’t be any intermediaries to distribute the products to the customers.
Direct distribution companies are very beneficial for the customers because it helps to eliminate the high expenses of using the intermediaries. This will allow the manufacturer to provide better customer support and the customer will get what they ordered much faster.
It allows the manufacturer to connect directly with the customers and can figure out what they want. This is very beneficial for making your products better and thereby increase sales. A direct-distribution channel is also good for better customer service. You can hear directly from the customers the complaints about your products and how you can improve it.
What Is Indirect Distribution Channel?
The indirect distribution channel is also good for the companies as it helps them to gain a significant advantage in the competition. This type of distribution channel allows the manufacturers to increase their customer base without meeting the customer door to door. This will allow them to focus more on making their products and services better.
Building the trust of the consumer is difficult and takes time. With indirect distribution channels, you can work with retailers and wholesalers who are already well-established to take your products to the consumers. It also helps you to enter a new market where you haven’t been established yet.
One of the main advantages of an indirect distribution channel over a direct distribution channel is that you will have a broader customer reach. This is because the wholesalers and retailers you work with will introduce you to a wider customer base.