Page 3 - Lesson Note 5
P. 3
7. Risk Taking: In the process of distribution of goods the merchant
middlemen take title of the goods and thereby assume risks on account of
price and demand fluctuations, spoilage, destruction, etc. assortment of
products for resale.
Types of Channels
A manufacturer may choose from direct distribution to indirect distribution and
from a short channel consisting of few intermediaries to a long channel of
distribution consisting of large number of middlemen.
Each form of channel network differs in number and type of middlemen involved.
The major types of channels are as follows:
Direct Channel (Zero Level)
The most simple and the shortest mode of distribution is direct distribution,
where in the goods are made directly available by the manufacturers to
customers, without involving any intermediary. This is also called zero level
channels.
A straight and direct relationship is established between the manufacturer and
the customer.
For example, when a manufacturer sells his goods through his own retail outlets
(e.g. Bata).
Indirect Channels
