7.4: Importance of Delivery Networks
Channel partners, intermediaries, and suppliers are crucial in a distribution network. They are the links that connect the product or service from the producer to the end consumer.
- Channel Partners: collaborate with a manufacturer or producer to market and sell the producer's products, services, or technologies, such as wholesalers, retailers, consultants, systems integrators, technology deployment consultancies, managed service providers (MSPs), and value-added resellers (VARs). For example, Apple Inc. uses channel partners like Best Buy, Walmart, and Amazon to sell its products to end consumers.
- Intermediaries: are entities that offer intermediary services in a supply chain. They can include distributors, wholesalers, brokers, agents, and retailers. Intermediaries can store products, reduce the number of transactions needed, provide market information, and offer customer support. In the book industry, for instance, publishers often use intermediaries like bookstores and online platforms (like Amazon) to reach their customers.
- Suppliers: Suppliers provide the raw materials or components required to create a product or service. They are a vital part of the distribution network as they directly impact production. An example would be Intel providing processors to Dell to produce their computers.
The strategic integration between these entities can significantly impact firms' overall performance.
