Title: Explain the concept of channels of distribution.
Course: Entrepreneurship, Advanced (12053-II) > Section: Marketing a Business

Explanation should include defining channels of distribution as the path a product takes from producer to consumer. Channel members or components of a distribution channel include

- producers
- wholesalers
- retailers
- agents
- end consumers.

Direct distribution takes place when the producer distributes directly to the consumer; indirect distribution involves one or more intermediaries. Hybrid distribution occurs when a manufacturer uses indirect, through one or more intermediaries, and also makes sales directly with the consumer.

The channel is determined by the type of product (e.g., physical vs. virtual product; service companies; vending).

Process/Skill Questions:

- How is a distribution plan like a blueprint?
- What problems can occur if product distribution breaks down?
- What factors should an entrepreneur consider when selecting vendors and suppliers?
- How does distribution fit into the supply chain management process?
- How can an entrepreneur decide how many vendors to use?
- How can an unreliable vendor affect an entrepreneur's business, sales, or customer relationships?
- How might the size and/or structure of a business affect the buyer-vendor relationship?
- How might treating vendors kindly benefit a business?
- What is the function of intermediaries?
- What are examples of products/services that are distributed directly? Indirectly? Hybrid?
- Why is it important that all aspects of distribution work together?
- How does a business determine the most advantageous method of distribution?
- What external factors might affect the channels of distribution?
- How can a company streamline the shipping process?