Lecture Introduction to business - Lecture 24: Distributing products. The following will be discussed in this chapter: The distribution mix, wholesaling, retailing, physical distribution. | Lecture 24 Chapter 12 Distributing Products Chapter Outline The Distribution Mix Wholesaling Retailing Physical Distribution Intermediaries/Middlemen Intermediaries Help To Distribute Goods Either By Moving Them Or Providing Information That Stimulate Their Movement Wholesaler Sells Products To Retailers For Re-Sale Retailer Sells Products Directly To Consumer Channels Distribution Channel Network Through Which Product Passes On Its Way To The End User All Channels Start With The Producer and End With A Consumer Or an Industrial Consumer Channels Of Distribution Direct Distribution No Intermediaries Producer Uses Own Sales Force Used By Many Internet Companies Retail Distribution Producer Sells To Retailer Growing Area In Internet Sales Wholesale To Consumer Once Most Prevalent Nondirect Method Requires Large Amount Of Floor Space Space Is Too Expensive Sales Agents/Brokers Agents/Brokers Represent Producer Agents/Brokers Paid On Commission Agents May Represent Several Similar Producers/Product Lines NonDirect Distribution Each Link Makes A Profit By Charging A Commission – Result Higher Prices 10 – 40 % For Manufacturer 2-25% for Wholesaler 5-100% for Retailers Intermediaries Create Added Value By Saving Time and Money Makes Product Available Where and When It Is Needed Nondirect Distribution Pros Intermediaries Provide Added Value Value Grows With Each Link Cons Markup At Each Link In Chain Higher Consumer Prices Value-Adding Agent Distribution Agent Is Sole Intermediary Agent Distributes To Consumer & Business Industrial Distribution Usually Direct From Producer To Industrial Buyer Goods Usually Purchased In Large Quantities Wholesale Distribution Of Industrial Products Used Mostly For Accessory Equipment Intermediaries Breakdown Large Quantities To Manageable Size Wholesale Distribution To Business Retailers Intermediaries Similar To Traditional Wholesalers Consumers Use Discount Stores That Buy In Volume And Sell In Small Quantities With Small Markup . | Lecture 24 Chapter 12 Distributing Products Chapter Outline The Distribution Mix Wholesaling Retailing Physical Distribution Intermediaries/Middlemen Intermediaries Help To Distribute Goods Either By Moving Them Or Providing Information That Stimulate Their Movement Wholesaler Sells Products To Retailers For Re-Sale Retailer Sells Products Directly To Consumer Channels Distribution Channel Network Through Which Product Passes On Its Way To The End User All Channels Start With The Producer and End With A Consumer Or an Industrial Consumer Channels Of Distribution Direct Distribution No Intermediaries Producer Uses Own Sales Force Used By Many Internet Companies Retail Distribution Producer Sells To Retailer Growing Area In Internet Sales Wholesale To Consumer Once Most Prevalent Nondirect Method Requires Large Amount Of Floor Space Space Is Too Expensive Sales Agents/Brokers Agents/Brokers Represent Producer Agents/Brokers Paid On Commission Agents May Represent Several Similar .
