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Importance of Delivery Networks
Manufacturers often delegate selling duties to intermediaries, like distributors, wholesalers, and retailers, surrendering some control over sales and distribution to reach the desired market efficiently.
These intermediaries, with their extensive networks and industry expertise, bridge the gap between producers and consumers.
They complement the manufacturers by transferring information, promoting products, engaging potential buyers, aligning products with buyer needs, and negotiating prices with consumers.
For instance, retailers can provide vital market information to manufacturers, promote products in-store, and negotiate prices with customers.
Furthermore, intermediaries support transaction completion through physical distribution, financing, and risk management. A distributor, for example, might store products, offer credit to retailers, and assume the risk of product damage or loss during transit.
Suppliers are equally vital in delivery networks, as they provide manufacturers with necessary raw materials or components on time to meet demand.
Together, channel partners, intermediaries, and suppliers are critical in delivering products and services efficiently, adding value for the customers and the manufacturers.
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.