Three-Level Channel Manufacturer to Agent to Wholesaler to Retailer to Customer : Three level channel of distribution involves an agent besides the wholesaler and retailer who assists in selling goods.
Retailers will procure the goods from wholesaler or distributors and sell it to the final consumers. You can also follow tutor2uBusiness on Twitter, subscribe to our YouTube channelor join our popular Facebook Groups.
As a result, the complexity of all transactions may be quite overwhelming. A producer of household goods, for example, like laundry detergent could just as easily sell their goods in Europe as in the United States.
Fourth, there are instances when the best channel arrangement is direct, from the producer to the ultimate user. They store and warehouse huge quantities of the products and sell them to other intermediaries in smaller quantities for a profit.
One level channel of distribution works best for manufacturers dealing in shopping goods like clothes, shoes, furniture, toys, etc. Identify natural partners If you want to grow beyond the direct model, look for companies that have relationships with your end-users. This one goes in the reverse direction and may go — from consumer to intermediary to beneficiary.
Maruti Suzuki Corporation sells its cars through more than dealer outlets in India and abroad.
What are the risks if an intermediary sells the product to an inappropriate customer? All the above mentioned functions should be considered logically in any market. Here, the wholesaler after purchasing the material in large quantity from the manufacturer sells it in small quantity to the retailer.