10 Questions
What type of business sells products directly to individual customers?
B2C
What is the typical flow of products in a general channel of distribution?
Manufacturer to wholesaler to retailer to end consumer
What is another name for each step of the distribution channel?
Link
What is the role of an agent in the distribution process?
To facilitate the distribution process
What is the term used to describe the interconnected network of organizations involved in the production, distribution, and delivery of goods or services?
Supply chain
What is an example of a B2B business?
A company selling office supplies to other businesses
What is the relationship between each segment in a distribution channel?
Each segment is a customer of the preceding segment
What is the term used to describe a person or business that helps facilitate the distribution process?
Agent
What is an example of an agent in the fashion industry?
A fashion showroom representing multiple designers
What is the last step in the typical flow of products in a general channel of distribution?
End consumer
Study Notes
Business Types
- 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.
Distribution Channel
- 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.
Distribution Process
- 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.
Agents in Distribution
- 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 and Indirect Distribution
- 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
- 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.
Test your understanding of business models and distribution channels. Learn about B2B and B2C businesses, and the flow of products from manufacturers to end consumers.
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