Difference between revisions of "Direct distribution"

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== Types of direct distribution channels ==
 
== Types of direct distribution channels ==
M. Andrejić and M. Kilibarda define three types of direct distribution channels <ref>M. Andrejić, M. Kilibarda (2015), p. 75-76</ref>:<br>
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* M. Andrejić and M. Kilibarda define three types of direct distribution channels <ref>M. Andrejić, M. Kilibarda (2015), p. 75-76</ref>:<br>
 
'''1. selling through catalog by mail or e-mail'''<br>
 
'''1. selling through catalog by mail or e-mail'''<br>
 
In that situation, distribution activities can be realized either by manufacturer (especially when product is very specific and unique) or by any [[logistics]] [[company]], which specifies on courier services.<br>
 
In that situation, distribution activities can be realized either by manufacturer (especially when product is very specific and unique) or by any [[logistics]] [[company]], which specifies on courier services.<br>
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'''3. business to business'''<br>
 
'''3. business to business'''<br>
 
Commonly, big batches of industrial products (e.g. wire, gasoline) are sold directly from manufacture to manufacture (customer-manufacture is interested in as low as possible prices and transportation costs; also in best possible terms).<br>
 
Commonly, big batches of industrial products (e.g. wire, gasoline) are sold directly from manufacture to manufacture (customer-manufacture is interested in as low as possible prices and transportation costs; also in best possible terms).<br>
 
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* In the works of V. Todorovich and O. Durden, this list is expanded by <ref>Todorovic V. et al. (2018), pp. 5-6</ref> <ref>Durden O. (2018), Chron.com</ref>:<br>
In the works of V. Todorovich and O. Durden, this list is expanded by <ref>Todorovic V. et al. (2018), pp. 5-6</ref> <ref>Durden O. (2018), Chron.com</ref>:<br>
 
 
'''4. Public Place Sales'''<br>
 
'''4. Public Place Sales'''<br>
 
Sales realized directly at points of [[production]] (e.g. farms), through exhibitions events, through auctions (e.g. flower auctions in Holland), etc.<br>
 
Sales realized directly at points of [[production]] (e.g. farms), through exhibitions events, through auctions (e.g. flower auctions in Holland), etc.<br>

Revision as of 10:19, 4 April 2019

Direct distribution
Primary topic
Related topics
Methods and techniques

Direct distribution – one of the three basic distribution methods, where products (or services) are shipped straight from producer to customer. In other two methods manufactured item or service reaches final client through mediators (wholesalers or/and retailers). Direct channel of distribution is the shortest and the most uncomplicated form of product distribution [1]. P. Szopa and W. Pękała emphasize that "using this kind of channels by producer retain full control over a disposal of products and the level of prices and services to him" [2].

Types of direct distribution channels

  • M. Andrejić and M. Kilibarda define three types of direct distribution channels [3]:

1. selling through catalog by mail or e-mail
In that situation, distribution activities can be realized either by manufacturer (especially when product is very specific and unique) or by any logistics company, which specifies on courier services.
2. e-commerce
From manufactures point of view everything looks similar to catalog selling; wider range of products can be sold, but less specific.
3. business to business
Commonly, big batches of industrial products (e.g. wire, gasoline) are sold directly from manufacture to manufacture (customer-manufacture is interested in as low as possible prices and transportation costs; also in best possible terms).

  • In the works of V. Todorovich and O. Durden, this list is expanded by [4] [5]:

4. Public Place Sales
Sales realized directly at points of production (e.g. farms), through exhibitions events, through auctions (e.g. flower auctions in Holland), etc.
5. Door-to-Door Sales
Door-to-Door Sales where one of the most popular to distribute some specific types of goods (e.g. vacuum cleaners), before internet becomes available to anyone. Manufacture employs salespersons, which travel all over the country and try to sell a product directly to a consumer (if product not portable enough, salespersons additionally organize delivery from producer to client’s home after sale).
6. Sales Through a Network of Own Stores
Manufacture can create a chain of own shops (or a single store, if producer is small), so that their products can get to the client directly. The disadvantage of this method - need of large investments. In addition, stationary stores will constantly generate costs (staff salary, rent payments, et cetera).

Footnotes

  1. M. Andrejić, M. Kilibarda (2015), p. 75
  2. P. Szopa, W. Pękała (2012), pp. 145-146
  3. M. Andrejić, M. Kilibarda (2015), p. 75-76
  4. Todorovic V. et al. (2018), pp. 5-6
  5. Durden O. (2018), Chron.com

References

Author: Pavlo Smereka