What are the types of distribution channels?

There are four types of distribution channels:

1, individual distribution channel structure: i.e., the traditional distribution channel, is composed of manufacturers, wholesale companies and retailers, the relationship between the loose sales network. Each member (enterprise) is independent of each other, the link between each other through the sale of conditions to maintain, bargaining, each for its own benefit, the conditions are suitable for the existence of the relationship between purchase and sale, is not suitable for each of them to act alone.

2, vertical distribution channel structure: is formed by the producers, wholesalers and retailers as a unified whole. It can be controlled by producers, wholesalers or retailers. They rely on the scale of operations, bargaining power and the elimination of duplication of services to achieve economic savings.

3, horizontal distribution channel structure: also known as horizontal distribution channel structure, refers to two or more of the same level of enterprise in order to make full use of resources and avoid the risk of the formation of short-term or long-term joint marketing channel structure.

4, compound channel structure: also known as multi-channel or dual channel structure. Refers to the production company through multiple channels to the same product to different markets or the same market.

Functions of the distribution channel:

1, classification: including the classification of products, classification, assembly, packaging, etc., so that the goods can be in line with the needs of customers.

2, logistics: including carrying out the transportation and storage of products to reduce the pressure of production enterprises.

3, financing and guarantee. That is, the acquisition and expenditure of funds for the work of the channel as well as guarantees for the production of enterprises.

4, risk-taking: that is, to bear all the risks associated with the channel work insurance as well as part of the risk for the production of enterprises.