Answer to Question #256059 in Management for Mira

Question

Factors to be considered by Takealot.com when changing their export distribution channels

Answer 1

Unit Value of the Product:

When the product is very costly it is best to use small distribution channel. For example, Industrial Machinery or Gold Ornaments are very costly products that are why for their distribution small distribution channel is used. On the other hand, for less costly products long distribution channel is used

Types of Buyers:

Buyers can be of two types: General Buyers and Industrial Buyers. If the more buyers of the product belong to general category then there can be more middlemen. But in case of industrial buyers there can be less middlemen.

Size of Market:

If the market area of the product is scattered fairly, then the producer must take the help of middlemen.

Buying Quantity:

It is useful for the manufacturer to rely on the services of middlemen if the goods are bought in smaller quantity.

 Number of Buyers:

If the number of buyer is large then it is better to take the services of middlemen for the distribution of the goods. On the contrary, the distribution should be done by the manufacturer directly if the number of buyers is less.