Direct distribution

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Direct distribution
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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]:
  • 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.

  • E-commerce

From manufactures point of view everything looks similar to catalog selling; wider range of products can be sold, but less specific.

  • 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]:
  • 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.

  • 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).

  • 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