What are the different types of distribution

Distribution - distribution of goods and services

In our post you can find out what the distribution is about in detail. Furthermore, we will inform you about the goals of distribution, what types there are and what different meanings distribution has in business administration and economics.

What does distribution mean?

Formulated in one sentence with the distribution is the Distribution of the property of a company to another economic entity meant. The distribution definition describes certain processes that, for example, often take place between producers and dealers.

The term distribution is often synonymous with the Concept ofmacroeconomic distribution used. The distribution relates in particular to:

  • Were
  • Services
  • right
  • income
  • information

What functions does the distribution have?

Distributions work on the basis of certain processes. These lead to the fact that, for example, manufactured goods are transported to the end customer with the help of retailers. Therefore, the distribution works through the control, the layout and the Control various processes. The focus is therefore on logistics, i.e. the Shipping of goods and the provision of services.

The meaning and functionality of the distribution can be understood well if you follow the following procedure considered:

  1. Receipt of an order
  2. Order to the warehouse to ship goods
  3. Goods are shipped from the warehouse
  4. Delivery of the goods
  5. Write the invoice to the intermediary or end customer
  6. Control and monitoring of incoming invoices
  7. Optional: taking back the goods, disposal or recycling
Distribution primarily means the delivery of goods and services from within a company and the associated processes. The recipients are mostly either intermediaries or the end customer.

What are the goals of distribution?

The usual job of the distribution is to create a Proper delivery of the goods to dealers or end customers to care. In this context, one goal is that the goods arrive at the correct place within the agreed time.

In addition, the Distribution process as efficient as possible and save costs. For this purpose, processes should be as extensive as possible automated become.

Types of distribution in the company

There are essentially two types of distribution, namely the direct and indirect sales. This distinction relates to what is known as acquisition distribution, in which all steps in the optimization of the sales channels are included.

Characteristic for the Direct sales is that no middlemen exist. Therefore, all sales channels belong to direct sales, in which the manufacturer or supplier of the product contacts the End customers turns. These include, for example:

  • Online stores
  • Local shops
  • Personal contact with customers at trade fairs
  • Catalogs

At the indirect sales In contrast, it is the case that the manufacturer does not take care of the sale of the goods himself. Instead, he usually has one Middleman to whom the goods are to be delivered.

Primarily come into question Retailers and wholesalers, Intermediaries or intermediaries with special tasks.

 

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In the following table we show you a summary again the possible distribution steps in companies and what happens there.

Measure / stepdescription
Order receiptEnd customers or intermediaries order a product
Order to the warehouseInventory check of the products in the warehouse
deliveryGoods leave the warehouse through a logistics company
Invoice will be sentGoods arrive at the customer / dealer
Monitoring incoming paymentsChange of ownership after payment, distribution ended

Significance of distribution in business administration and economics

When it comes to distribution, a distinction must be made between business administration and economics. As part of the Business administration is primarily the distribution with the Distribution of produced goods and services meant. The distribution describes all processes between manufacturers and dealers or end customers.

As part of the National economy on the other hand, the distribution will give priority to the Distribution of wealth and income shown. This is not about goods, but instead about money and assets.

Distribution usually describes a business process, i.e. the change of ownership of goods and services. From an economic point of view, however, wealth and money change hands.

Distribution in franchise companies

In addition to the general definition, there is one in the context of franchising Distinctive feature of the distribution. This is based on the fact that franchise companies and the corresponding networks usually divide up work within a so-called vertically cooperative sales system.

For example, the respective franchisor generally purchases the goods themselves and centrally. The head office receives goods and materials that are then distributed to the franchisees. These in turn sell the products to the end customer. Thus, in principle, franchise companies operate on the basis of a Mixed form between direct and indirect sales.

Software for distribution

There are a number of corresponding software solutions to ensure that distribution is as efficient as possible. You can find some offers, for example, under the following link: https://www.capterra.com/distribution-software/

Conclusion

The distribution describes Delivery and sales processeswhich are carried out in almost all companies that trade in goods and services.

Various processes and Processes that have probably been standard in your company for years.

 

Image source: pixabay.com / echosystem