Decisions for a Distribution Channel & Impact of e-commerce
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1. What decisions go into selecting a distribution channel? What decisions go into selecting new distribution channels? What is the difference between a vertical and a horizontal distribution channel? Give an example.
3. What impact has E-Commerce had on traditional brick and mortar business? Give at least two examples and explain why. How can a business determine what proportion of the budget should be allocated for E-Commerce? How has E-Commerce globalized the small business?
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Solution Summary
The solution answers two separate questions on the decisions that go into selecting a distribution channel and the impact that e-commerce had on traditional brick and mortar business in 607 words.
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A distribution channel is how you get the product from the manufacturer to the stores. There are several channels - you can sell your product directly from the manufacturer to a distributor; then the retailer sells it to clients.
The key is to decide how you will work the channels. Will you decide to mass distribute your product to as many distributors as possible (who will then sell it to as many stores as possible)? Or, will you decide to be exclusive and decide to only work on a limited basis with a few distributors? A final option is do we want an exclusive and sell to only 1 retailer. Once this is decided, we need to assess how will we get the products to the end location - will it be shipped via train, boat, or plane?
All of these depend on how you want your product to be perceived. A more upscale product might only go a select number of retailers, ...
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