What are distribution channels and why are they important for marketing – WAU

Distribution channels are the resources by which products travel to the final consumer.

Every company that works in the commercial field has an interactive system through which it delivers its products to the final consumer. This process is known as the distribution channel and the manufacturer, the medium that distributes it and, finally, the consumer, participate in it.

Although they are closely linked to traditional marketing, distribution channels are also applicable to Digital Marketing and, in this post, we will talk a little more about it.

You will understand:

What are distribution channels?

They are the means by which a manufacturing company chooses to deliver its products to the consumer Final, ensuring that it is as profitable and efficient as possible.

The distribution channels are formed by service providers who investigate the market, promote the products and negotiate, with customers, prices, delivery methods and stocks related to the quantity of products they need.

Three important actors participate in a distribution channel:

  • the producers;
  • wholesalers;
  • retailers.

These participants can be warehouses, transport companies, shops, among others.

How important are distribution channels?

The importance of distribution channels lies mainly in the fact that, through third parties, it is possible for the product to reach a greater number of consumers, so that there is an increase in sales.

Producers generally do not have their own distribution network, which is why they work with a tertiary company that generally has commercial contacts and a wider geographic reach.

In addition, they have secure warehouse services and means of transport and, in some way, are committed to the product finally reaching its destination.

Through distribution channels, a producer achieves important goals: offer your goods in the right place, within the reach of the consumer, in the shortest possible time.

What are the types of distribution channels?

Distribution channels are classified according to several characteristics.

Direct channel

It is a work unit that belongs to the same production company and is directly responsible for delivering the goods to its customers.

This requires the company to have space to store products and means of transport to deliver. In addition, you must have direct contact with customers.

Indirect channel

They are third party companies responsible for providing the service. Such distributors divide the work according to costs, prices, type of market and form of commercialization of the product.

These characteristics define channels in the following ways.

Level 1

It is the distribution format in which the product goes directly from the manufacturer to the retailer, which takes it to its final destination. Companies like Amazon apply this distribution process.

Level 2

In that case, there are only two agents. The merchandise goes directly from the wholesale distributor to the retailer and is finally delivered to the consumer. This distribution chain is generally applied in small companies.

Level 3

Here three distribution agents – a wholesaler, a retailer and an exclusive distributor who also participates in the sale of the product – are involved.

How are the distribution channels classified?

Distribution channels can be classified according to the business category.

We have already talked about how it works in the consumer line, but there are different working models for industry and services.

From producer to industrial customer

In this sector, the most used distribution channel is that which goes directly from the producer to the industrial consumer.

This is because delivery times are shorter, there are fewer procedures involved, it is easier to meet customer requirements and the profit is greater.

From producer to industrial distributors

Industrial distributors, basically wholesalers, participate as intermediaries in this process. They are responsible for purchasing the product and subsequently selling it in large quantities for less.

What are the distribution channels in Digital Marketing?

Looking at the current technological context, it is impossible not to think that traditional distribution channels can be brought into the digital world.

Yes, distribution channels are part of Digital Marketing, and are basically the online routes through which a better service is offered to customers.

In fact, it was marketing strategies that were gradually incorporated into the business line with the aim of improving sales and growing commercially.

Philip Kotler, a leading marketing expert, believed that when companies started to grow at the production level and their distribution channels also started to improve, it was essential to take a new approach to the business structure, incorporating marketing strategies that would help improve internal administrative processes.

Now you must be asking yourself: what are the applicable distribution channels in the digital world?

Distribution channels in the digital world facilitate consumer access to a specific product or service. This access is only possible by generating valuable content.

By creating this content, it is possible to improve the positioning on the internet search engines, in addition to winning customer loyalty.

Distribution channels are increasingly important for companies. Depending on the type of business you have and the brand you want to position, there is an appropriate model that can help you achieve your goals.

Globalization, high competition in the market and customer consumption numbers require companies to dedicate themselves to applying effective and successful positioning techniques.

Now that you know everything about distribution channels, how about knowing some tips to improve your point of sale? Understand more in this post!