If the relations between the producer and the selling agent become strained, or if the selling agent fails to distribute the goods, the producer will be put to a great loss. He cuts down on his marketing expenditure and the expenditure incurred on maintaining a sales organisation and a sales force.īut, in doing so, he takes a big risk of relying only on the sole selling agents, he places himself at the mercy of his selling agent. He avoids the risk involved in selling and, wants to concentrate on production. He wants to pass on the risk of marketing the goods to the selling agents. The manufacturer may appoint a single sole selling agent or he may appoint sole agents area-wise. The sole agent, in turn, may distribute to wholesalers who, in their turn, distribute to retailers. The entire production of goods is delivered to the sole agent for further distribution. The last channel, from the producer-sole agent-wholesaler- retailer to the consumer, the used by some producers.

(e) Wholesalers and retailers can provide good promotional support. In this case, the buyers are business houses, government agencies, consumer co-operative stores, etc. This is a shorter channel, and the producer eliminates the retailer in this channel link. Under industrial goods are included goods which are used for further production and not for resale. The third channel, from the producer-wholesaler to the consumer, can be successfully used in distributing industrial goods. However, the manufacturer will have to undertake such functions as transportation, warehousing and financing. This channel is also suitable when the goods are of a perishable nature, and quick distribution is essential. Goods like electrical appliances, fans, radios, ready-made garments and a host of other articles fall in this category. In these cases, the wholesalers may be by passed because the bulk of the goods are purchased by these large retail distributors to be sold to the consumers. The second channel, from the producer-retailer to the consumers, is preferable where the purchasers of goods are big retailers like department stores, chain stores, super markets or consumer co-operative stores. In this case, buyers can be directly contacted and goods can be sold by direct personal approach. In this category fail such goods as complex machinery involving high technology, computers and luxury cars. The first channel, from the producer to the consumer, is preferable when buyers are few and the goods are costly and mostly purchased by industrial users.

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