Channels of distribution are pathways brands and retailers use to move products from manufacturers through warehouses and stores and into consumers’ hands.
From a shopper’s perspective, purchasing a product is as easy as placing an order and having it show up at your doorstep a few days later. But for that process to happen, businesses need several supply chain steps and channels of distribution.
These channels are pathways through which a product moves from its manufacturer to the consumer, and typically involve several different intermediaries, including wholesalers, warehouses, retailers, distributors, and more.
There are two types of channels of distribution: direct and indirect.
In direct distribution, a product manufacturer sells the product directly to a consumer without any intermediaries in between.
Indirect distribution typically involves a chain of businesses that handle, store, package, and sell the product to the consumer.
Indirect channels of distribution can often be more costly and complex, as they involve multiple parties. However, these routes help spread the manual load often placed on manufacturers in direct distribution.