Conventional Distribution - Definition, Importance & Types
What is Conventional Distribution?
The conventional distribution channel is the most common distribution channel. Conventional distribution comprises of a producer, wholesalers and retailers, all acting independently. This channel ensures flow of goods from producer to the end customers via the wholesalers and retailers.
Importance of Conventional Distribution
Conventional distribution channel is important for a business as it defines the stages of a finished product and how it reaches the consumer. In the conventional distribution channel, each stage operates individually and are mutually exclusive. Hence, having coordination between these three becomes the major challenge for such a system. Also, channel conflicts are very common, leading to disruptions in distribution. Due to this, companies are now going towards developing integrated channels (vertical marketing systems or horizontal marketing systems).
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Types of Conventional Distribution Channels:
a. Direct Distribution
In this, the producer directly sells the goods to the consumers. Direct sales can be done via a shop, company website, telephone, sales representatives etc.
b. Indirect Distribution
In this type of conventional distribution, a producer uses intermediaries to sell their products. Depending upon the number of intermediaries, there can be single level (retailers), two level (wholesalers & retailers) or multiple level.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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