Q.Distinguish between a direct channel and an indirect channel of distribution.
A direct channel, also called a zero-level channel, involves no independent middleman at all — the manufacturer sells and delivers the product straight to the final consumer, as in door-to-door selling or a manufacturer's own retail outlet. An indirect channel, by contrast, involves one or more independent middlemen standing between the manufacturer and the consumer — a retailer alone (one-level), a wholesaler and a retailer (two-level), or an agent, a wholesaler, and a retailer together (three-level).
The two differ in several practical ways. A direct channel gives the manufacturer full control over pricing, display, and customer contact, and a higher margin per unit, but is expensive and slow to expand across a large, scattered market. An indirect channel spreads the product much more widely and quickly by using the existing infrastructure and market contacts of independent middlemen, but the manufacturer gives up some control and the final consumer price tends to be a little higher, since every middleman in the chain earns its own margin.
Direct channel = manufacturer to consumer with zero middlemen; indirect channel = manufacturer to consumer through one or more independent middlemen (retailer/wholesaler/agent), trading some manufacturer control and margin for much wider market reach.
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