P2 Explain the process of distributing goods through different channels from the manufacturer to the customer In this task I am going to explain the process of distributing goods through different channels from the manufacturer to the customers. This report is based on the different distribution channels, which business use to distribute goods to the customer. Firstly, this report will explain the different channels that the manufacturers use for distribution and explaining the process that is used by a range of businesses. Secondly, this report will explain their methods that will be compared, in terms of distributing products and services.
Lastly, the report will end with the conclusion of how the role of distribution systems make the sector more efficient, cost effective .and my overall opinions, regarding the distribution systems. The term distribution means the process of delivering, storing and selling goods. So this way, the products can be used by customers. Delivering is about what types of transport which are used to carrying and delivering goods. The types of transport these are: Rail, Road, Air and Water. Storing is about where the goods is about where the products come from to be stored. Selling is the process you do, when you sell the goods.
Distribution channels consist of a chain of business or intermediaries which form a process where the goods and services pass until it reaches the consumers. It includes: wholesalers, retailers, distributors and even the internet. These channels can be broken in two different way direct and indirect channels. Direct channel the consumers are allowed to buy their products directly from the manufacturer. The direct channels are also considered shorter that indirect channels. The indirect channel the consumer are allowed to buy goods from wholesaler. Channel 1: The intermediary levels are wholesalers and retailers, the ones that buy products from producers or manufacturer and store them in large quantities of several producers’ goods. Then they sell into smaller quantities and deliver these products to a smaller retailer such as restaurants.
Channels 1 1
Channel 2: This channel is common with electrical goods manufacturers, who sell their products directly to retailers such as Curry’s/PC World and Amazon, Sainsbury’s who then sell them to the consumer. Sainsbury’s is a supermarket retailer which operates over 1,106 stores, selling food, appliances, technology and services such as energy, banking and broadband. Sainsbury’s do not use a wholesaler to buy their goods from, and instead get them from many different suppliers, therefore their distribution
Channel 3: This is known as the fastest way to distribute goods with a shorter life-cycle. This channel is known by selling directly to the consumers For example, agricultural goods are sold straight from the farm, business buy raw materials manufacturers get the fresh fish from the sea and then sell the goods directly to the customers, in nearest markets or supermarkets like Morrison’s, who sell fresh fish.
Channel 4: Involve selling the product overseas markets moving goods in Europe and worldwide through an agent, who sells them to wholesalers on behalf of the company.
Transportation: Manufacturer should be fast enough for the product to reach its destination in time. However, they must also be cost effective, efficient and safe. These factors are taken into account when deciding which method of transportation is used. Road: It is cheap and fast which requires no rail links. Not cost effective if Lorries are not used often, may need to hire a specialist transport business instead. Railways: It is useful for long distances.
It is cheaper than road however, goods are needed to be transported to retail stores by road haulage at the end of the destination. Sea freight: It is used mainly for international trade which can carry a lot of products. Products are stored in containers, which can be easily loaded onto Lorries. Air freight: It is fastest way of delivering products fast but expensive which is often used for small or perishable products. Pipelines: As roads are not always available, this is mostly used to transport liquids or gases over long distances. It is cheaper than using road haulage for liquids.