Distribution is the process of getting a product from the producer to the consumer.

Main objective of distribution

To make products avaliable in the right place at the right time in the right quantities.

Distribution Channels

A distribution channel moves a product through the stages from production to final consumption.

Each party in a distribution channel is called an intermediary.


  • Break bulk
  • Buy large volumes of products at a low price and resell smaller quantities at a slightly higher (but still cheaper than the market) price
  • Retailers can order smaller amounts of product from wholesalers.
  • A wholesaler makes money by buying at a lower price from the producer and adding their profit margin onto the price paid by the retailer.


  • Specialist type of distributor
  • Does not hold stock
  • Tend to operate in the tertiary sector (services)
    • Travel
    • Insurance
    • Publishing
  • Earn a commission based on sales achieved

Direct vs Indirect Distribution channels

  • Direct Distribution
    • Channel where a producer and consumer deal directly with each other without the involvement of an intermediary
  • Indirect Distribution
    • Involves the use of intermediaries between the producer and consumer

Factors to consider

  • Nature of the product
    • Perishable/fragile
    • Technical/complex
    • Type of product
    • Desired image for the product