What factors should be considered in the choice of distribution channels?

Distribution channels can be divided into traditional distribution channels and network distribution channels, but what factors should be considered in the choice of distribution channels? What are the characteristics of distribution channels? I brought it for you? Distribution channels? Related knowledge, this may be what you need.

Selection factors and market factors of distribution channels

Including the target market range? Wide market range, suitable for long and wide channels; On the contrary, short and narrow channels are suitable. Customer concentration? Centralized customers, suitable for short and narrow channels; Customers are scattered and suitable for long and wide channels. How much and how often do customers buy? Small purchase volume and high purchase frequency, suitable for long and wide channels; On the contrary, the purchase volume is large and the purchase frequency is low, which is suitable for short and narrow channels. Seasonal consumption? Non-seasonal products are generally produced in a balanced way, and long channels are often used; Instead, use more short channels. Competition? Generally speaking, similar products should adopt the same or similar sales channels as competitors unless the competition is particularly fierce.

Product factor

Including physical and chemical properties? Products with large volume, heavy weight, perishable and easy loss are suitable for short channels, direct sales channels or special channels; On the contrary, long and wide channels are applicable. Price? Generally speaking, high-priced industrial products and durable consumer goods are suitable for short and narrow channels; Low-priced consumer goods are suitable for long and wide channels. Fashion? Products with high fashion are suitable for short channels; Products whose styles are not easy to change are suitable for long channels. Degree of standardization? Standardized and versatile products, suitable for long and wide channels; Non-standardized products are suitable for short and narrow channels. Technical complexity? The more complex the product technology, the higher the requirements for after-sales service, which is suitable for direct sales channels or short channels.

Enterprise's own factors

Including economic ability? Enterprises with strong financial resources have the ability to choose short channels; Enterprises with weak financial resources can only rely on middlemen. The management ability of the channel? Rich channel management ability and experience, suitable for short channels; Enterprises with low management ability are suitable for long channels. The desire to control channels? Strong desire, often choose short and narrow channels; If the desire is not strong, choose a long and wide channel.

Intermediary factor

Including the possibility of cooperation? If middlemen are unwilling to cooperate, they can only choose short and narrow channels. Cost? The cost of using middlemen for distribution is very high, and only short and narrow channels can be used. Service? The service provided by middlemen is of high quality, and enterprises adopt long and wide channels; On the contrary, only choose short and narrow channels.

environmental factor

Including the economic situation? In the period of economic depression and recession, enterprises often adopt short channels; The economic situation is good, and long channels can be considered. Relevant laws and regulations? Such as monopoly system, import and export regulations, anti-monopoly law, tax law, etc.

Extended reading of distribution channels

After channel design, enterprise managers must also select, motivate, evaluate and adjust individual middlemen.

① Select channel members. Generally speaking, it is easy for well-known and powerful manufacturers to find suitable middlemen; It is difficult for low-profile, new, small and medium-sized manufacturers to find suitable middlemen. No matter how difficult it is, manufacturers should pay attention to the following conditions when choosing channel members: whether they can be close to the target market of the enterprise; Whether the geographical location is favorable; How big is the market coverage; Whether the middlemen are familiar with the sales targets and users of the products; Whether there are mutually promoting products or competitive products in the commodity categories operated by middlemen; Capital scale, credit level, operating history and rich experience; What business facilities, such as transportation, storage conditions, sample display equipment, etc.; Quantity and quality of employees; The strength of sales ability and after-sales service ability; Management ability and information feedback ability.

② Encourage channel members. Producers should not only choose middlemen, but also often encourage middlemen to do their duty. The factors and conditions that urge dealers to enter the channel have already constituted some incentive factors, but producers should pay attention to the criticism of middlemen, and the criticism should be put in their own shoes, not just from their own perspective. At the same time, producers must try their best to avoid excessive incentives (such as conditions that are too favorable to middlemen) and insufficient incentives (such as conditions that are too harsh to middlemen).

③ Evaluate channel members. In addition to selecting and motivating channel members, producers must also evaluate their performance objectively on a regular basis. If the performance of channel members is excessively lower than the established standards, it is necessary to find out the main reasons and consider possible remedial measures. When giving up or replacing intermediaries will lead to worse results, producers have to tolerate this unsatisfactory situation; In the absence of worse results, the producer should ask the middlemen with poor performance to improve within a certain period of time, otherwise they will be disqualified.

④ Adjust the sales channels. Adjust the channel structure according to the actual situation and the performance of channel members: increase or decrease channel members; Increase or decrease sales channels; Variable distribution system.

Characteristics of distribution channels ① Distribution channels reflect the realization process of specific commodity value and the transfer process of commodity entities. One end of the circulation channel connects production and the other end connects consumption, which is a complete commodity circulation process from production to consumption. In this process, there are two main movements: one is the movement of commodity value form (the transfer of commodity ownership, that is, business flow), and the other is the movement of commodity entity (that is, logistics).

(2) The main bodies of distribution channels are merchants, middlemen and agent middlemen who participate in the process of commodity circulation.

(3) In the process of goods flowing from producers to consumers, the ownership of goods is transferred at least once. In most cases, manufacturers must resell their products through a series of middlemen or agents. The more times of ownership transfer, the longer the distribution channel of goods; On the contrary, it is.

④ In the circulation channels, there are a series of auxiliary circulation forms directly or indirectly related to the transfer of commodity ownership, such as logistics, information flow and capital flow, which play a very important coordinating and auxiliary role.

The types of distribution channels can be divided into:

① Direct channel. Direct selling channel refers to the channel type in which products are directly sold by manufacturers to consumers and users without the participation of middlemen. Such as door-to-door sales, TV direct sales, online direct sales, etc. Direct selling channel is the main way to sell industrial products, especially some large, special and complex technical products that need to provide special services.

The advantages of direct channel are: for products with single use and complex technology, production can be arranged in a targeted manner to better meet the demand; Producers directly introduce products to consumers, so that consumers can master the performance, characteristics and usage of products; Because the direct selling channel does not go through intermediate links, it can reduce the circulation cost, grasp the price initiative and actively participate in the competition. However, the direct selling channel also has some shortcomings, such as the large investment and expenses of manufacturers in sales and the limited sales scope.

② Indirect channels. Indirect channel refers to the channel type in which products are sold to consumers and users through one or more commercial links. It is the main way of selling consumer goods, and it is also the way adopted by many industrial products.

The advantages of indirect channels are: the intervention of middlemen reduces the number of transactions, saves the circulation cost and time, and reduces the product price; Middlemen focus on expanding the scope of circulation and product sales, while manufacturers can concentrate on production, which is beneficial to producers and consumers in the whole society. Its disadvantage is that the intervention of middlemen makes the communication between manufacturers and consumers inconvenient.

In addition, distribution channels can be divided into long channels and short channels according to the number of intermediate links (levels); According to the number of middlemen at each channel level, it is divided into wide channels and narrow channels; According to the close relationship between channel members, it can be divided into traditional channels and channel systems. Traditional channels refer to distribution channels composed of independent manufacturers, wholesalers, retailers and consumers. Go your own way and pursue the maximization of your own interests. In fact, however, neither of them can maximize their own interests. Therefore, the channel system now tends to operate in combination or integration, from competition to alliance, in order to become bigger and stronger and maximize profits.

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