There are a number of channels of distribution available to the producer, which may be employed by him to bring his products to the market. Consumer goods may be distributed generally through channels, in each of which the manufacturers may use the sales branch or sales office as the additional alternative. One of the channels used is Producer-Consumer, where no middleman is involved. Sales are made from house to house or by direct mail.

A second channel is Producer-Retailer-Consumer, by which goods may be purchased directly from manufacturers. Retail stores may also be opened by manufacturers by this channel.

A third channel is Producer-Wholesaler-Retailer-Consumer, which is the traditional and most economical channel. Penultimately, there is Producer-Agent-Retailer-Consumer, in which many producers use manufacturing agents, brokers, etc. for reaching the retail market. Finally, there is Producer-Agent-Wholesaler-Retailer-Consumer, where the services of agents are utilized by the smaller retailers, who purchase from a wholesaler and sell to small stores.

A large number of channels of distribution are available to the manufacturer for bringing his product to the ultimate consumer. Efficient distribution at the least cost and attaining the desired volume of sale can be secured only after experience, study and analysis. The notice of the product, its unit value, its technical features, and its degree of differentiation from competitive products are the factors which may limit the number of potential channel alternatives.

A retailer, as the name indicates, does retailing, which is to say he sells to ultimate consumers. In the distributional hierarchy, retailers are below the level of stockists, distributors, and wholesalers. Sometimes, retailers are termed dealers or authorized representatives. The retailer often operates in a smaller territory or at his specific location; earns lesser commission compared to higher levels in the channel; he does not carry out stock holding and sub-distribution functions.

A stockist or distributor or wholesaler is also a large sized operator but not on par with the marketer or sole selling agent in level, size and territory of operation. Stock holding and sub-distribution, as per the policies laid down by the manufacturers or the marketers, are the main functions of stockists/distributors.

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