A distribution channel is defined as a series of intermediaries which pass the product downwards the chain to the organization that is next; this is before reaching the consumer. This is called the channel or distribution chain. More over, each of these of the elements has their own needs, so the producer must consider along with those of the consumer. There are two types of distribution channels: direct and indirect. In a direct marketing distribution channel, the marketer or a company sells their product directly to the customer. The use of the Internet has helped a lot in making the use of direct channels a success. More over, companies can cut down costs by using this type of distribution channel. There are no other parties in between involved in distributing the product (Louis 2006).
When a sale takes place, there are methods of communication that are involved. Firstly, direct marketing systems, which involves the consumer placing their order through information obtained from contact with the company that is non personal. This includes means like the marketers catalog or website. Secondly, there is direct retail system which exists when a marketer operates retail outlets of their own. Thirdly, there are personal selling systems which involve salesperson in the distribution process (Lancaster 1988). They persuade the consumer to place an order. So, the salesperson ends up playing a role in generation of the sales. Lastly, there are the assisted marketing systems, which involves the marketer having to rely on others in communicating their product but the distribution is done by them.
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On the other hand, indirect distribution has the marketer or company reaching the customer with help from others. They do not sell directly to the customers. There are resellers involved who may own the product. The intermediaries may have many responsibilities attached to them in helping sell the product. Indirect methods that could be used are, firstly, the single-party selling system. It involves the marketer engaging with another party who will sell or distribute the product to the customer directly. It is also called trade sell system. Secondly, there is multiple-party selling system. In this, the product passes through many distributors before its final destination. For example, the manufacturer sells to a wholesaler who then sells to retailers. Indirect selling is cheap and simple while the direct one is more expensive. However, a company has more control in control in direct distribution (Louis 2006).