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There Are Types Of Distribution In Businesses That People Need To Know

In general, there are two types of distribution businesses, namely direct distribution and indirect distribution. But under special conditions, there is also a type of distribution called semi-direct. What are the differences between the three types of distribution exotrac? We will share information about it with you in this article. Aside from that, if your company oversees a large-scale freight yard with a busy distribution line, we suggest you apply the best yard management software in your system.

Here are types of distribution that people must know:

Direct Distribution

Direct distribution is the business of distributing goods that are carried out directly by producers to consumers, alias without intermediaries. This type of direct distribution is suitable for small entrepreneurs. The reason is certainly that it is related to capital because to use the services of a distributor requires no small cost and will reduce product profits. Usually, also small companies have a narrow reach so it is still possible to be handled alone through direct distribution.

Indirect Distribution

If direct distribution means that the distribution activities are carried out directly by the producers, then, of course, the indirect distribution means that the distribution activities are carried out by using the services of distributors both wholesale and retail. This method is commonly used by large companies with extensive marketing. In addition, it is usually used for products that are durable because the distribution process itself requires a certain time.

Another reason why direct distribution is widely used by large companies is related to capital. This is because direct distribution will involve many parties. Therefore, substantial costs are inevitable, one of which is for promotion.

Semi-Direct Distribution

If the direct distribution is carried out by the producer and indirect distribution is carried out by a third party or distributor, then what is semi-direct distribution like? It turns out that this type of distribution is intended for distribution activities that continue to use the services of distributors or distributors but with special specifications. This is usually done by producers of special, luxury, expensive, or high-quality goods so they must get special handling by experts. Because it is very risky, usually the distributor used is actually the property of the company or the manufacturer itself.