Structure of FMCG Distribution Channels

Different countries have different FMCG distribution channels. However all channels may be explained by applying straightforward ideas like directness, levels, density, diversity, and novelty.

• Directness describes interactions between producers and consumers that take place without the involvement of a third party. When a manufacturer supplies goods to a customer through distribution networks, this is known as indirect distribution.
• The term “level” describes how many channels can move a product from the manufacturer to the final consumer. Manufacturers work with franchise dealers in the auto industry, who then sell the items to the final customer. This channel has one level. Manufacturers frequently sell their products to wholesalers in the FMCG sector, who then sell them to retailers, who then sell them to consumers. This waterway has two levels.
• The number of outlets that are present in a specific area is density. A distribution channel is classified as exclusive or intensive based on the number of outlets. Automobile distribution, which has fewer outlets in a city and is exclusive, is different from the distribution of soap, which has a large number of outlets, including wholesalers, supermarkets, and grocery stores.
• Variety describes the different kinds of outlets where a product is sold. Given that they are offered in a number of locations, including paan shops, grocery stores, canteens, supermarkets, general stores, and even online, biscuit distribution may be very diverse. Given that sarees are sold only in specific stores, the distribution may be of low variety.
• Novelty describes the fresh methods that manufacturing firms use to distribute their goods. Vending machines and online commerce are both very new to India and are seen as novelties.

Read more: FMCG Distribution Channel Network