Channel conflict

Posted in Operations and Supply Chain Terms, Total Reads: 3975

Definition: Channel conflict

It is a conflict between the channel members due to the perceived unfairness. There are 2 types of channel conflicts:

- Vertical: It is the conflict between producer and intermediary or intermediary at one level and intermediary at the other level.  The primary reason why vertical channel conflict occurs is when the trade partners in the distribution channels are agonized because the company directly sells its products to the consumer. These days it is primarily happening due to the advent of internet. With the help of e-commerce, the companies directly sell their products via internet and hence the sales volume of other distribution channels is reduced.

-Horizontal: It is the conflict between channel members at the same level. Example: between retailer-x and retailer-y or wholesaler-x and wholesaler-y. It happens due to the perceived unfair practice adopted by the one channel member which in turn affects the profitability/sales of other channel member.


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