Types of distribution channels

 

There are two high-level types of distribution channels, direct and indirect.  In the direct distribution channel, goods are moved directly from the Producer to the Consumer.  In the indirect distribution channel, the producer will meet consumer demand through third -party wholesalers and/or retailers.  Direct channels produce short supply chains, indirect channels produce long chains.
Research and report on two large producers, Costco and Apple, and describe in detail which distribution approach each company uses — direct, indirect, or mixed – for at least two products in each company.

 

 

 

Sample Solution

Companies worldwide use direct or indirect distribution channels to pass their products to consumers. Costco is one company that thrives from using an indirect distribution channel. Other companies, such as Apple Inc., use a mixture of direct and indirect channels. A mixed distribution approach has more benefits than indirect and direct means independently (Fang, 2019). Apple uses the mixed distribution approach to sell products like iPhones and Mac laptops. In 2022, the company generated more than $394 billion in revenues; the iPhone sales generated $205.5 billion, while Mac laptops generated $40 billion (Cuofano, 2022).

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