Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 23 Channels of Distribution Notes
→ A channel is the route through which the goods are passed on to the ultimate consumer.
→ According to Cundiff E.W. and Still, a channel of distribution may be defined as “a path traced in the direct or indirect transfer of title to a product as it moves from the producer to ultimate consumers”.
→ According to American Marketing Association, “A channel of distribution is the structure of intra company organization units and extra company agents and deals wholesale and retail through which a commodity or product or service is marketed”.
→ The VARs receive the products from the manufacturers, incorporate them as if their own products by adding value enhanced service and sell them to customers.
→ Producers adopt this channel to distribute goods or services in the home country and foreign countries.
→ Seasonal products are distributed through less layer of middlemen.
→ The term ‘Middlemen’ refers to all those who are in the link between the primary producer and the ultimate consumer in the exchange of goods or service.
→ A Broker is one who bargains for another and receives commission for his service.
→ A factor is a mercantile agent to whom goods are entrusted for sale by a principal.
→ A commission agent buys and sells goods on behalf of the principal for a fixed rate of commission for all his transactions.
→ Auctioneers are agents who sell goods by auction on behalf of their principals.
→ A Warehouse keeper accepts goods for the purpose of storage in his warehouse.
→ Drop Shippers are another type of limited-service wholesaler.
→ Truck jobbers (or truck wholesalers) actually store products, which are often highly perishable (e.g., fresh fish), on their trucks.
→ Rack Jobbers sell specialty products, such as books, hosiery, and magazines that they display on their own racks in stores.
→ Wholesale trade means buying and selling goods in relatively large quantities or in bulk.
→ According to Cundiff and Still “wholesaler buys from the producer and sell merchandise to the retailers and other merchants and not to the consumers”.
→ According to Evelyn Thomas “a true wholesaler is himself neither a manufacturer nor a retailer but act as a link between the two”.
→ A wholesaler arranges for the transport of goods from producers to his warehouse and from the warehouse to retailer.
→ Retail trade is a trade that deals with the distribution of goods in small quantities to the end consumers.
→ According to S. Evelyn Thomas “the retailer is the last of the many links in the economic chain whereby the consumer’s wants are satisfied smoothly and efficiently by retailers”.
→ According to Cundiff and Still “a retailer is a merchant or occasionally an agent whose main business is selling directly to the. ultimate consumers”.
→ A retailer has been defined as “a trading intermediary engaged in the distribution of goods to the ultimate consumer”.
→ A wholesaler serves as a link between producers and retailers.