What is meant by “marketing channels”?

When a seller thinks about how to sell his products or services he exactly analyzes which channel can be used. Depending on goals, possibility to advertise, brand awareness and other many factors, the seller, anyway, will choose that one that will be the fastest, cheapest and the most productive and effective.

Direct channel: from me to you

Everything is very simple here. When you see your favourite bakery and they sell all their products immediately, probably they have a cookery behind the wall. It means they have no third party to apply for and bread comes exactly from manufacturer to the buyer.

These are often goods of short term for usage as an example above. The seller doesn’t have so much time to think and at the end of the day may offer prices at prime cost just not to waste money and products.

Let’s add one more participant: from me to the retailer to you

This method is very popular for not perishables like jewellery, porcelain, clothes, shoes, things for home etc. The retailer has its time to sell the goods at the prices he would like, while the manufacturer is happy as he is no longer worried where to keep all the things and how to sell them. But don’t forget about online advertising platform that bring more revenue for your online services or product.

Buyer is at winning and losing positions at the same time. Retailer’s price would be a bit higher than purchasing from the manufacturer directly, but you don’t have to worry if the jeans you want are sold at the factory – you may by them from the intermediary and, probably, at the initial price as nobody wants to litter.

Changing of the guard: from me to the wholesaler to you

The principle is similar as we have just discussed, the only difference is that wholesaler buys by wholesale at lower prices and, thus, the customer will also pay less. Sometimes such shops may be poorly decorated as their slogan is: pay for the goods and not for the interior environment. Buyers are also often offered discount system, loyal cards and can buy cheaper. The manufacturer is absolutely happy here as all his products are sold in big amounts and he can count income and pay salaries to the workers.

Let’s make it more complicated: from me to the agent to the wholesaler to the retailer and, finally, to you

This model was designed for manufacturers selling goods for quick consumption. Bakery is a good example, but it is a boulangerie supplying the whole city like Washington, it will certainly fail to sell all the products alone. They give part of their products to the agent who, in his turn, allocates it between wholesalers and then to retailers and then buyers can get it in the shop. Of course, the price in this case will get higher as there are many participants involved.

Where is your way?

A lot depends on the size of your business and the type of goods you sell. Old ladies, selling vegetables from their gardens are unlikely to need a wholesaler or retailer. The amount of their goods is too small and can be easily spoiled by the time of going through all chain.

Big companies, like city bakers can combine 2 models: one can buy bread in a store, but they may also have small cafes where visitors can enjoy fresh pastry with coffee and, probably with the same, but just baked breads at a bit lower costs.