Business and Distribution Channels

Study Notes

B2B (Business-to-Business) companies sell products or services to other businesses, such as a company selling office supplies to other businesses.
B2C (Business-to-Consumer) companies sell products or services directly to individual customers, such as a clothing brand selling products to individual customers.

A general channel of distribution involves the flow of products from the manufacturer to the wholesaler, then to the retailer, and finally to the end consumer.
A distribution channel is referred to as a supply chain, representing the interconnected network of organizations involved in the production, distribution, and delivery of goods or services.
Each step of the distribution channel can be referred to as a link or stage in the supply chain.

Each segment in the distribution channel relies on the segment that comes before it, with each segment serving as a customer to the segment before it.
The distribution process involves the interconnected network of organizations involved in the production, distribution, and delivery of goods or services.

An agent in the context of distribution channels is a person or business that helps facilitate the distribution process.
Agents are also referred to as intermediaries, and can include entities such as fashion showrooms that represent multiple designers and connect them with retail buyers.

Direct distribution involves the producer selling products directly to the end consumer.
Indirect distribution involves the use of intermediaries, such as wholesalers or retailers, between the producer and the end consumer.
Examples of direct distribution include designers selling products directly to customers through their own online stores, while examples of indirect distribution include designers selling products to department stores, which then sell them to customers.

Physical distribution refers to the activities involved in moving products from the producer to the end consumer.
Physical distribution activities include transportation, warehousing, and inventory management.