Distribution channels

López-Quesada, Agustín
Gusó, Andrés

Trade Distribution is the link between manufacturing and consumption of services and goods. Its main role consists of delivering products to consumers for their use, exploitation or destruction. Generally, majority of manufacturers use intermediaries. We certainly can say that we will be outsourcing the trading of our products or services.
We could define our Distribution Policy as follows: "The meaningful and methodical way of establishing to whom to sell by delivering the product or service at the best quality possible, on time, in full and at the right place."
An organisation can hardly set the product price without considering which trade channel we will be using to reach the final consumer. The number of third parties involved in the distribution channel will be one of the key drivers to consider, as each of them will contribute to increasing the final product or service cost price. Trade margin will be determined by this kind of decisions.