ALL SAINT’S SECONDARY SCHOOL, OYIGBO

CLASS: JSS 2

SUBJECT: BUSINESS STUDIES

TOPIC: DISTRIBUTION

 

WHAT IS DISTRIBUTION?

The passing of goods from different channels to the final consumer is known as distribution.

 

FACTORS TO BE CONSIDERED BEFORE CHOOSING A CHANNEL OF DISTRIBUTION

 

1, Location Of Customers: If customers are scattered in many areas of the country, the longer the channel the better. But if customers are not many, shorter channel might be considered.

2, Size Of Order: If consumers buy in large quantities, the producer may decide to skip the middleman.

3, Nature Of Product: The nature of product helps you to choose a better channel. If a product is expensive or perishable, shorter channel is better, e.g the sale of aeroplane is always i.e, from the manufacturer to the consumers.

4, Financial Strength Of The Producer: If a producer is financially strong, he can use his own outlet to distribute his goods, otherwise, longer channel will be used.

5, To Control Retail Price: Producers who may not need a big margin may prefer a shorter channel.

 

TYPES OF DISTRIBUTION

There are two types of channel of distribution namely- Direct Channel of Distribution and Indirect Channel of Distribution.

 

Direct channel of distribution is when the producers bypass the middlemen and sells directly to the consumers, i.e, from the Manufacturer — Consumers.

E.g, when goods are expensive or highly perishable, direct channel is used. The channel is also known as two-way channel.

 

Indirect Channel Of Distribution is when middlemen are involved in moving goods from the producers to consumers.

 E.g 1.  Producer — Retailer — Consumer.

E.g 2.   Producer — Wholesaler — Retailer — consumer

This is the traditional method of channel of distribution. It is commonly used by producers especially when goods are widely used and consumers are scattered.

 

Assignment

  1. What is the next step after production?
  2. When a product is expensive, what channel will be used?
  3. Recommend a channel for a producer who manufacturers perishable goods.
  4. True or False: Production is finished when the manufacturer stores the goods in his warehouse.

 

Submit at the school’s security post

 

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