1. Manufacturer direct to retail store.

The manufacturer or supplier delivers direct from the production

point to the retail store, using its own vehicles. As a general rule, this channel is only used when full
vehicle loads are being delivered, thus it is quite unusual in today’s logistics environment.
D 2. Manufacturer via manufacturer’s distribution operation to retail store. Here, the manufacturer or
supplier holds its products in a finished goods warehouse, a central distribution centre (CDC) or a series
I of regional distribution centres (RDCs). The products are trunked (line-hauled) in large vehicles to the
S sites, where they are stored and then broken down into individual orders that are delivered to retail
stores on the supplier’s retail delivery vehicles. All of the logistics resources are owned by the
T
manufacturer. This type of channel is still commonly used by the brewing industry.
R 3. Manufacturer via retailer distribution centre to retail store. This channel consists of manufacturers
I
either supplying their products to national distribution centres (NDCs) or RDCs for final delivery to
stores, or supplying them to consolidation centres, where goods from the various manufacturers and
B suppliers are consolidated and then trans- ported to either an NDC or RDC for final delivery.
U 4. Manufacturer to wholesaler to retail shop. This physical distribution channel has altered in recent
years with the development of wholesale organizations or voluntary chains (often known as ‘symbol’
T Channel alternatives: groups in the grocery trade). They originated on the basis of securing a price advantage by buying in
I manufacturer-to-retail bulk from manufacturers or suppliers.
5. Manufacturer to cash-and-carry wholesaler to retail shop. These are usually built around a wholesale
O
organization and consist of small independent shops collecting their orders from regional wholesalers,
N rather than having them delivered. The increase in cash-and-carry facilities has arisen as many suppliers
will not deliver direct to small shops because the order quantities are very small.
6. Manufacturer via third-party distribution service to retail store. Thus, a number of companies have
C
developed a particular expertise in logistics operations. These companies can be general distribution
H services but may also provide a ‘specialist’ service for one type of product (china and glass, hanging
garments) or for one client company.
A
7. Manufacturer via small parcels carrier to retail shop. This channel is very similar to the previous
N physical distribution channel, as these companies provide a ‘specialist’ distribution service where the
N ‘product’ is any small parcel. The competition generated by these companies has been quite fierce.
Small parcels carriers also undertake many home deliveries, as discussed below.
E 8. Manufacturer via broker to retail store. This is a relatively rare type of channel and may sometimes be
L a trading channel and not a physical distribution channel. Its role is different, however, because it is
often more concerned with the marketing of a series of products, and not necessarily with their
physical distribution.
 1. Mail order. The physical distribution channel is thus from manufacturer to mail order
house as a conventional primary transport (line-haul) operation, and then to the
consumer’s home by post or parcels carrier, bypassing the retail store.
D
2. Factory direct to home. It is also commonly used for one-off products that are specially
I made and do not need to be stocked in a warehouse to provide a particular level of
S service to the customer.
3. Internet and shopping from home. Shopping from home via the internet is now a very
T common means of buying products. Initially, physical distribution channels were like
R those used by mail order operations – by post and parcels carrier. In the grocery
Channel alternatives: direct
industry, home delivery is usually undertaken on small specialist vehicles that operate
I deliveries from distribution centers or from retail stores. A completely new channel development
B is that of computer-to-computer, as some products, such as music, software, films, and
U books are distributed directly online.
4. Factory to factory/business to business (B2B). The factory-to-factory or business-to-
T business channel is an extremely important one, as it includes all the movement of
I industrial products, of which there are many. This may cover raw materials, com-
ponents, part-assembled products, etc. Options vary according to the type and size of
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product and order.
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It can be seen from the list of alternative channels that channel structures can differ very
markedly from one company to another. The main differences are:
C • the types of intermediaries (as shown above)
H • the number of levels of intermediaries (how many companies handle the
product before it reaches the final customer)
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• the intensity of distribution at each level
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Channel alternatives: different
structures Some small- and medium-sized companies may have simple channel structures. Many
N companies, however, have a number of different products and a number of different
E types of customers. Companies such as these will therefore use several different
channels to get their products to market. This, together with the large number of
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variable factors and elements possible within any channel structure, makes it difficult to
identify what might be called a ‘typical’ channel of distribution.