Distribution Expenses

Posted in Marketing and Strategy Terms, Total Reads: 4964

Definition: Distribution Expenses

Distribution expenses, also known as distribution costs, are all expenses incurred to make the product reach from the manufacturer to the end user.


Varieties of costs are included in this and are not only limited to freight expenses. Inventory handling costs, packaging costs, salaries of personnel looking after distribution are all included in distribution expenses however freight costs remain the most important factor in it.


A lot of above mentioned costs are interlinked with each other and it is very important to use this links to find the lowest possible cost for the required level of efficiency and flexibility in a distribution system.


Who incurs the distribution costs at various stages of the supply chain depends on the understanding between the partners involved but generally the member who is sending the product to the member downstream of him is the one who incurs the cost.


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