What is meant by ‘Indirect Channels of Distribution’? Explain any two methods of Indirect Channels of Distribution.
Indirect Channels: When a manufacturer gets help of one or more middlemen to move goods from production place to the consumption place , the distribution channel is called indirect channel. Following are the main types of it:
(i) One Level Channel: In this method an intermediary is used. Here manufacturer sells the goods directly to the retailer instead of selling it to agents or wholesaler. This method is used for expensive watches and other like products. This method is also useful for selling FMCG (Fast Moving Consumer Goods). This channel is clarified in the following diagram:
(ii) Two Level Channel: In this method/medium manufacturer sells the material to the wholesaler, wholesaler to the retailer and then retailer to the consumer. Here wholesaler after purchasing material in large quantity from the manufacturer sells in small quantity to the retailer. Then retailers make the products available to consumers. This medium is mainly used to sell-soap, tea, salt, cigarette, sugar, ghee etc. This channel is more clarified in the following diagram:
