Industrial Distribution Channels #3

Today I am: Taking notes and focusing on how industry moves product.

So I can: Compare channels of distribution for industrial products

I will know I’m successful when: I can identify businesses functioning within the four different industrial channels

Two general types of distribution channels

Consumer

Industrial

Five Channels

Four Channels

Industrial Distribution ChannelManufacturers/Producers

Agents

Distributors

Industrial Users

A B C D

Most used

1) Channel A is by far the most common. Producers hire their own sales force

2) Distributors are similar to wholesalers on the Consumer side, but incorporate a strong sales element

3) Agents work representing small companies

Industrial Distribution ChannelManufacturers/Producers

Agents

Distributors

Industrial Users

A B C D

Most used

Examples:A – Business equipment sales. Copiers, computers, many things.B – Sell to specialized distributors. Restaurant or plumbing supplies distributor.C – Small manufacturer with specialized product, again to a specialized distributor.D – Manufacture with a “big ticket” specialized product. A farm tractor for instance direct to a farm.