The Distribution Channel Value

From Working at Cross Purposes: How Distributors and Manufacturers Can Manage Conflict Successfully, published by NAW.

The traditional functions provided by distributors include the following:

  • Distributors serve as market makers by acting as selling agents for suppliers and buying agents for customers in geographically defined markets.
  • Distributors fill a cost-transfer role through various elements of physically distributing products.
  • Distributors can add value through product customization because they phyically possess products.
  • Distributors act as banks, playing a large role in financing the growing economy.
  • Distributors provide post-sale service and support.
  • Distributors fulfill a very valuable information transfer function.

These traditional functions have stood the test of time because the distributor could provide them more effectively to the channel than either the producers of products or the consumers of products.