What Is The Difference Between Direct And Indirect Channel Of Distribution?

Getting products to the marketplace for a business is very important, and there are two types of distribution channels that exist for this to happen. An indirect channel is when companies and businesses do not sell their products directly to the customers and consumers. These products could go to other companies who need the resources, and therefore this channel of distribution is mostly common when the business is early in the production line for a certain product. Alternatively there is the use of direct channels. Here, products and goods are sold directly to the customers and this cuts the costs of involving other companies and agencies. Both direct and indirect channels of distribution have been made easier with the ascension of the Internet.

For both methods of distribution, online services have made life a lot easier. Digital systems allow companies to sell directly to the consumer via websites and individual orders, while for indirect distribution, the Internet has allowed the transaction of placing large orders easier between companies and manufacturers. With the help of technology, direct and indirect channels of distribution has become quicker and easier. Whichever way you chose to sell your products, you can be sure that it will be done successfully.

It is also your company’s prerogative as to whether you sell directly to the consumer, to other companies, or even both. Make sure that you are aware of which way is going to make the most out of your product and provide you with the largest profit.

Direct channels to market are typically your sales force.  Direct channels to market include any route to market that you control and finance directly.  The direct channel is typically more capital intensive to establish and you typically achieve a far greater level of control over this channel than you do the indirect channel.  The indirect channel includes agents, distributors, licensees, affiliates, franchisees and other routes to market that you may support your product (and possibly others) and that you do not control directly.  Your indirectchannels typically cost less to establish than your direct channels to market but you have less control. On the plus side, you can achieve significantly more coverage.  Cost, Control and Coverage are three of the most important things to think about when deciding the ideal mix of direct and indirect channel.  Indirectchannel Ltd. Is one organisation that provides more information on this topic.  They do not appear to make significant comments, claims or indeed to review specific channels but the company was founded by channels experts.  Anywy to get the right answer for your organisation, the best thing is to start with your objectives in mind.  Ask yourself what you want to achieve and determine how the different channels to market that are available and feasible might help or hinder your goals.  I hope this helps you better understand and appreciate the ideal mix and balance between direct and indirect routes to market for your company..

In indirect distribution an intermediary is involved between the manufacturer and the buyer. That intermediary is responsible solely for the distribution of goods on the behalf of the company. For example, a UK manufacturer markets and supplies its products through another UK company. This company will be considered as the intermediary of the manufacturing firm. On the other hand in the direct selling the manufacturing firms hire a sales staff and there is a direct trade-off between buyer and the seller. In this case no intermediary is involved.

Secondly, indirect selling is simple and cheap while direct distribution channels require more budget. Thirdly, the seller does not have a control over the distribution of its products in the market. These intermediaries have nothing to do with the image of the manufacturing company. This is not the case in direct channels because in that case company has more control on the distribution of its products. In this way company can maintain its image in the market by providing convenience and accessibility to buyers.