Two Level Distribution Channel

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Definition: Two Level Distribution Channel

The distribution channel involves producers, wholesalers, retailers and the end customers. Value addition in terms of price takes place at each of the stages in distribution channel.

There are basically three types of distribution channels which are as follows:

1. From producers to wholesalers to retailers to customer

2. From producers to retailers to end customer

3. From producers to end customers, these channels act as the distributing networks for either products or services.

Out of the three channels, the first one and third one are the most prevalent channels currently. The first channel is used for products like FMCG while the third channel comes into picture when a manufacturer sells his products directly to the end customer through factory outlets and others. The second channel holds true for big retailers like amazon and others who purchase from the manufacturers directly instead of the wholesalers.

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