1.3.4 Distribution

Question 1

What is breaking bulk?

Answer 1

Wholesalers buy in bulk from manufacturers and sell in smaller amounts to retailers.

Question 2

What are agents and what are they rewarded per sale?

Answer 2

They sell products on behalf of a business to customers and are generally rewarded commission per sale

Question 3

What is a channel of distribution?

Answer 3

The route a products takes from the manufacturer/producer to the consumer

Question 4

How do wholesalers affect distribution?

Answer 4

They simplify the distribution for the manufacturer because without a wholesaler the manufacturer has to make separate deliveries to lots of retailers.

Question 5

What are the different channels of distribution?

Answer 5

Direct selling (2 stage channel), indirect selling (3 stage channel) and indirect selling (4 stage channel)

Question 6

What is direct selling (2 stage channel)?

Answer 6

These are products/services which are sold straight from the MANUFACTURER TO THE CONSUMER. This can be done through using electronic marketplaces like eBay or creating e-commerce sites

Question 7

Why is direct selling (2 stage channel) beneficial for small businesses?

Answer 7

It’s a low cost option because you sell goods through electronic marketplaces

Question 8

What is Indirect selling as a 3 stage channel?

Answer 8

This is the MANUFACTURER selling to a RETAILER which sells to a CONSUMER

Question 9

What is 3 stage indirect selling used for and beneficial for?

Answer 9

Common distribution channel for recreational items like clothes, shoes and homeware. They are usually in places which are convenient to the consumer like the a shop on the high street

Question 10

What is 4 stage indirect selling?

Answer 10

MANUFACTURER—>WHOLESALER—>RETAILER—>CONSUMER

Question 11

What are 4 stage indirect distribution channels used for?

Answer 11

It is a traditional distribution channel used for groceries. Eg by supermarkets

Question 12

Why is 4 stage indirect distribution bad for the consumer?

Answer 12

It can increase costs to the consumer because each stage of the distribution channel wants to make profit

Question 13

What is multi channel distribution?

Answer 13

When businesses sell through more than one method. Eg Online and in store

Question 14

Benefits of multi channel distribution?

Answer 14

. Wide market coverage for manufacturers
. Gives flexibility for customers
. The business can target a wider market

Question 15

What is online distribution?

Answer 15

The streaming or downloading of media content.

Question 16

What is the consumer buying with online distribution?

Answer 16

The right to download the media content

Question 17

Benefits of online distribution?

Answer 17

. Reduces costs eg. no need to spend on boxing products
. More environmentally friendly
. Can be cheaper for the consumer than buying the physical product
. Low set up costs
. Can be run from anywhere which internet
. Can respond to changing needs quickly