A Distribution channel is a chain of intermediaries through which goods or services pass until it reaches the last buyer or consumer. While distribution channels may seem endless and complicated, traditionally, these channels include the manufacturer, wholesaler, retailer, and nowadays, even the internet. Distribution channels are part of the downstream process of getting products to the customers.
CHOOSING THE RIGHT DISTRIBUTION CHANNEL
In choosing the right distribution channel for your products, you should consider how quickly you want your products to reach their buyers. Take the nature of the products into consideration. Certain products are best distributed via a direct distribution channel. Such products include; animal or farm products. Other foodstuffs are better served by an indirect channel.
A company that chooses multiple distribution channels like; online sales and retailers should ensure that these channels do not clash with each other. Formulate tactics to ensure that one channel does not overpower the other.
PROBLEMS ASSOCIATED WITH GROCERY STORE DISTRIBUTION CHANNELS
Every grocery store is usually confronted with problems related to the distribution network and inventory merchandising. The wide variety of items in grocery stores that often require choices makes it difficult for them grocery store owners or managers to handle inventory effectively.
Problems can occur when distribution partners have inadequate knowledge of the products or target market. This could most likely result in poor service to customers, and loss of sales. This problem can be avoided by educating and arming distributors with adequate training programs that could help familiarize them with the products.
The growing demand for healthy food alternatives has to lead to a gradual decline in the business of grocery stores. Studies reported in Forbes, 2015 show that consumers are willing to pay more to eat healthy foods. Although, this does not necessarily have to pose a problem anymore as manufacturers distributors and are striving to make healthier food options available to the consumers.
The stress of handling fresh, easily perishable foods like fruits and vegetables in a bid to maximize the freshness and get it to the consumers on time. This poses an additional challenge as perishable foods need to move out of the door as soon as possible to maintain its short shelf life, or else it results in a loss for the producers.
Seasonal peaks and shortage of manpower is another problem facing distribution channels to grocery stores. Distribution is highly dependent on manpower. The older generations who are more inclined towards this are gradually retiring with less young generation willing to replace them. Young graduates seem unenthusiastic about careers in warehousing.
Lastly, more extended distribution channels can mean less profit for each intermediary for its service. The longer the chain of supply, the lesser the dividend of each channel.