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Asked a question 4 years ago

What factors entrepreneur should consider while selecting distribution channel for his products?

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Distribution channel means the route or path through which goods or services passes to  will reach the ultimate consumer. An efficiently distribution channel ensures that product or services are available at right place and at  right time and enhances utility of the products. It also helps firm to expand reach and maximize sales and revenue. It helps in stabilizing the prices by ensuring continuous supply of goods and services in right qualities. So the entrepreneurs should carefully consider the following factors while planning channel of distribution are :

  1. Nature of product - size of the products, unit value, technicality of products, perishability etc. 
  2. Nature of market - number of buyer, location of buyers, consumer 's taste and preferences etc. 
  3. Company factors - financial resources, desire to control channel of distribution, volume of output produced, experience and competence of management etc. 
  4. Nature and type of distribution - middlemen availability, cost of channel, legal and sales consideration of distributing etc. 

Thus an entrepreneur should wisely choose right channel of distribution as a bad decision can cost very high to the firm.