Retail Channel Network – Distribution Chain Types

The retail channel is one of the most important parts of the distribution chain. Without the distribution, the retailer cannot distribute its products and make a profit. Each business in the retail channel performs a specific function such as purchasing goods and delivering them to the customer. There are many important functions that are performed by the retail channel and some of these functions are discussed below. While some of these functions may be performed by other businesses too, the retailer can not do all these functions unless it has its own distribution network.

The retailer buys goods from the manufacturer who produces the product. 

The goods are then stored until they are ready for sale. At the point of sale, the retail outlet either sells the goods or displays them for the customer to choose. The retail outlet will also display the products that have been ordered for future sales.

There is a distribution chain that connects the retailer with the ultimate users. 

The ultimate users may be end users or customers. The ultimate user may be an individual or a firm who buys products from the retailer. The distribution channel enables the retailer to sell the products directly to the end user.

The retailer sells the products to the distribution firm. 

The distribution firm stores the products and then sells them to the end users. The retail outlet acts as a sales person for the distribution firm. It is the job of the retail outlet to make the sale and persuade the customer to purchase the product. Retailers do this through various channels like the retail floor, online retailing, at the retail counter, displays and so on.

A retail outlet also deals with the payments and collection of payments from the customers. The retailer organizes the whole system from the point of sale. The retail outlet can also arrange for the collection of payments from the customers. This is done either through the retail machine or through credit cards.

The distribution chain includes retail stores, wholesale dealers, importers and wholesalers. 

The major benefit of retail outlets is that they provide the consumer with the products they want at the price they want. They are a medium between the manufacturer and the consumer. As we know the distribution channel has its own advantages and disadvantages, which have to be weighed before deciding to enter into a retail chain of stores.

An important advantage of retail outlet networks is that it provides a way of promoting the products and services to increase sales. 

A retail outlet network has its own benefits like improving brand recall and promotion of new products. It also provides an opportunity for advertising which can reach a wider audience. As the products are displayed in a retail outlet, the viewer can choose which product they would like to try. If they are interested in that particular product, they would be more likely to buy it.

An additional benefit is that the retail outlet network gives an opportunity for retailers to expand their business through a network of retail outlets. As many retailers enter into a retail chain of stores, there is increased competition and rivalry. This results in improved prices and discounts offered by retail chains of stores. A retail outlet network offers additional opportunities for these retailers to increase their sales and reduce cost of doing business.

Another advantage of a retail outlet network is that it helps minimize operating costs. 

As the retailer contacts other retailers who are part of the retail outlet network, there is a chance of discounts and other promotional offers. Thus, it helps to increase sales and increase customer loyalty. It is also the retailer’s strategy to build brand awareness. The cost of running the retail outlet network is low as compared to other forms of advertising. In addition to that, there are several other benefits such as time-effective and cost-effective.

The network of retail outlets can be expanded by purchasing some retail properties or by starting from scratch. 

The nature of retail business dictates that at some point, you will need to purchase retail property. Thus, if you are looking for an outlet, it will be easier for you to find one that will be profitable for you. A retail outlet network will provide you with various properties at different locations. You can select one at your convenience and depending on your financial ability and the amount of land you have available. You will thus be able to start your own retail business.

A retail outlet network will offer you a wide range of choices to choose from. The network will also help you save a lot of time. Once you have chosen a property, you can then get in touch with the other retailers and their agents to look for retail space. You do not even have to leave your home to find out about property availability. Thus, with a retail outlet network you have the advantages of finding good quality retail real estate for a reasonable price.

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