1.3.4 Distribution

Question 1

What is the main objective of distribution?

Answer 1

To make products available in the right place at the right time in the right quantities

Question 2

What is a distribution channel?

Answer 2

A chain of business’ or intermediaries that a good/service passes until it reaches the final buyer

Question 3

What is an intermediary?

Answer 3

Each separate party/stage in a distribution channel

Question 4

What’s a 4 stage channel?

Answer 4

Producer -> wholesaler -> retailer -> customer
(Producer sells in bulk to wholesaler, retailer buys stock and sells to customer

Question 5

What’s a 3 stage channel?

Answer 5

producer -> distributor -> customer
(Producer sells to distributor , eg apple sell to curries and distributor sells to customer)

Question 6

What is a 2 stage channel?

Answer 6

Producer-> customer
(Producer sells straight to customer eg, gym shark sell to customers through their website for clothes they make themselves)

Question 7

How do wholesalers make money?

Answer 7

from buying stock at a low price from producer and adding a profit onto it which is paid by the retailer

Question 8

What is break bulk
(Wholesalers do this)

Answer 8

Where wholesales buy in large quantities from the producer and then sell smaller quantities to retailers

Question 9

What’s 2 advantages of wholesalers?

Answer 9

-Retailers can order in small amounts from wholesalers
-Reduces producers transport costs as they make fewer journeys to wholesale than they would often to retailers

Question 10

What is the role of a distributor?

Answer 10

They purchase products from manufacturers and re sell them to retailers (cressco). They hold stock

Question 11

What is an agent?

Answer 11

A specialised type of distributor that doesn’t hold stock who tend to sell and operate in services

They earn commission based on sales achieved

Question 12

What are retailers?

Answer 12

The final step i the chain who deal with customers

Question 13

What are the 6 various kinds of retailer?

Answer 13

1-Multiples-chain of shops owned by single company
2-Specialist chain-eg) perfume, fashion
3-Department stores (eg John
Lewis)
4-Convenience stores (spa, costcutter)
5-Independents (shop run by an owner)
6-Franchises

Question 14

What are the 2 advantages of retailers?

Answer 14

-They create convenience for customers
-They hold stock