Distribution Channels in Trade
If there is a surplus production of a commodity at some physical location and some one needs it , an exchange (trade) can take place . When many such exchanges take place between producers and consumers , channel of distribution need to developed . A channel of distribution can be defined as collection of organization units , either internal or external to the manufacturer , which performs the functions involved in products marketing . The various marketing functions are buying , selling , transporting , grading , financing market risk and providing marketing information . Any organizational unit , institution or agency that perform one or more of the marketing functions is a member of the channel of distribution . The structure of a distribution channel is determined by the marketing functions performed by the concerned organization . Some organizations perform only a single marketing function . For example ; Carriers may only transport products and public warehouses may