1.3.4 Distribution ****** Flashcards
Definition of distribution
The delivery of goods from the producer to the consumer.
Definition of distribution channel
The route taken by a product from the producer to the customer.
What are the different distribution channels?
- Manufacturer
- Wholesaler
- Retailer
- Consumer
Examples of changes in distribution to reflect social trends
- growth in online shopping
- building of shopping malls
- supermarkets extending open hours
- flourishing of charity shops
What is online distribution?
Most important new trend. Often called e-commerce as it involves the use of electronic systems to sell goods and services. There are 2 main types.
What are the types of online distribution?
- business to consumers (B2C)
- business to business (B2B)
What is B2C?
The selling of goods by businesses directly to consumers. Most e-tailing involves ordering online and and delivery at home.
However new ‘click and collect’ services are being developed where people can pick it up from a central hub. This eliminates the risk of delivery
What is B2B?
Involves businesses selling to other businesses online. Businesses can also use specialist software to find the cheapest supplier.
What are the benefits to consumers of online distribution?
- cheaper because online retailers often have lower costs
- consumers can shop 24/7
- huge amounts of choice
- can shop from anywhere if they have access to the internet
What are the benefits to businesses of online distribution?
- no cost of operating a store
- lower start up cost
- less paper needed for documents
- online payments such as PayPal
- wider market
- serve customers 24/7
Disadvantages of online distribution for businesses
- increasing competition from overseas
- lack of human contact might not suit all customers
- heavy reliance on delivery services
- viruses, security risk
Disadvantages of online distribution for consumers
- cannot physically inspect the goods
- risk of poor after-sales service
- problems with delivery times (working)
