Channels of commodity circulation, or how your product will reach the consumer

Today the system of commodity circulation and distribution channelsare an integral part of any company's development strategy, allow it to expand its sales markets, increase customer base, and increase the competitiveness of its products. In this regard, when building a company's strategy, it is necessary to take this system into account.

The system of commodity circulation in marketing representsa complex of processes for the movement of goods, which includes such elements as: the formulation of orders, warehousing, control over the quantity of goods in a warehouse, transportation. At the same time, for the construction of a system of goods circulation, the company can use both internal services and attract outside organizations.

Channels of commodity circulation are an important part of the company's marketing policy. From what channels the company chooses for itself, depends the success of its products on the market, and, of course, the revenues of the company itself.

So, let's take a closer look at the essence and types of channels of commodity circulation.

The channels of commodity circulation are ways towhich is the physical movement of goods from the producer to the end user. A final consumer of a commodity is a person who uses the goods to meet his own needs. On the other hand, the channels of commodity circulation are also ways and means of delivering goods to consumers. Also, by this term, we can mean the aggregate of individuals and legal entities that are intermediaries in the process of commodity circulation.

Depending on its complexity and structure, the channels of commodity circulation can be divided into 3 main types: direct, indirect and mixed.

In the case of using direct channelsGoods are directly delivered from the manufacturer to the end user. In such a scheme, no intermediaries participate. That is, the chain of goods movement is as simple as possible: it looks like the producer is the end user. When using the direct channel of goods circulation, all the functions for the movement of the goods and their sale are assumed by the manufacturer himself.

Direct channels of commodity circulation, as a rule, are used in the sale of such goods as complex technological equipment, or in the production of products or the provision of services under a specific order.

The next type of commodity circulation channels is moredistributed - these are indirect channels. In this case, the manufacturer removes part of the functions for the delivery of goods to end users. The scheme of the movement of goods is complicated. It adds a new element - the middleman (and), that is, the chain is as follows: the producer - the intermediary (and) - the end user. As intermediaries are dealers, distributors, agents, retail intermediaries. The manufacturer, of course, loses direct connection with the consumer of its goods, but the use of such a channel gives an obvious advantage - the expansion of the sales market and the greater efficiency of sales. Thanks to their connections and the scope of their activities, wholesale and retail intermediaries ensure the wide availability of goods and bringing it to the target markets. The manufacturer, while losing some of its profits in favor of intermediaries, nevertheless remains in the win, as it saves its own resources and time. The market for the sale of its goods expands to such a level that it would not be available to the manufacturer if it operated on the market alone.

The last type of commodity circulation channels - mixed - combines the elements of the first two channels.

An important condition for the effectiveness of thechannels of commodity circulation are the minimum expenses of the seller and the timeliness of the delivery of the goods to the market. As a result, you can achieve good results.