Factors Influencing Channel of Distribution:
The factors determining the suitability of a channel for a product distribution are as follows:
a) Product Characteristics:
1. Seasonal products are distributed through less layer of middlemen.
2. Non standardized products that are made according to customer specifications may be delivered directly.
3. But standardized products may be passed on through middlemen.
4. Trucks which are heavily needed to be distributed with less layers of distribution.
5. The life of perishable products is limited and should reach the consumer at the earliest. e.g. Flowers and milk.
b) Market Characteristics:
1. The size of the market for the goods is a major factor while selecting the route for distribution of products.
2. Distribution in large geographical area requires more middlemen.
3. Middlemen are not required to distribute products in a limited area.
c) Number of Consumers:
1. Large purchases made by few consumers require centralised distribution.
2. Large number of consumers making purchases in small quantities requires more middlemen.
d) Middlemen factor:
1. Middlemen who are experienced and have produced more sales are wanted by all producers.
2. Long channel naturally increases the cost and price of the product. The number of layers of middlemen should be kept at minimum.
3. The competitor who is efficient in reducing distribution cost will sell more as his price is less.
4. More middlemen means, less control and more problems for the producer.
5. Quality of distribution service. can be ensured and loyal customer base can be created with less middlemen.
6. In some areas there may be scarcity of right middlemen and in some other cases the policies of producers may be not acceptable to the middlemen.
e) Capacity of the Manufacturer:
1. A financially strong producer may select a high technology oriented channel which will reduce cost in the long run.
2. Manufacturers with large volume of production may open direct branches in cities and towns where there is more sales.
3. They can also provide more services expected by consumers.
4. Small and medium, producers require the services of middlemen for selling their products.
5. A producer offering wide range of products can have a long channel as he can defray the cost of distribution over more number of products.
f) Cost and time involved in the channel of distribution :
The channel cost should go along with the quality of service provided by middlemen. Ordinary goods are sent through economical channel even though the time taken by the channel for delivery is more.
g) Service required. along with the product :
Machinery or equipment which need to be installed and demonstrated should be sold with minimum channel. Technical services can be provided by manufacturers or their trained technicians. Therefore shorter channel is preferred for sales.
h) Life cycle of the product:
An established product can select an ordinary channel. But a new product entering into the market should be carefully promoted by experienced middlemen.

The services rendered by retailer to the consumers as follows:
(i) Regular supply of goods :
(1) Retailers maintains a ready stock of various products of different manufacturers for sale to consumers.
(2) This enables the buyers to buy products as and when needed.
(ii) New products information:
The retailers provide important information about the new arrival of products through their personal selling efforts and effective display of products.
(iii) Credit Facilities :
Sometimes retailers provide credit facilities to their customers and enable them to increase their level of consumption.
(iv) Wide Selection:
(1) Retailers generally keep stock of variety of products of different manufacturers.
(2) This enables the consumers to make their choice out of wide selection of goods.
(v) Miscellaneous service
(1) Retailers provide free door delivery services to the customers.
(2) They provide after sales service to customers.
(3) They allow cash discount on their sales.

A wholesaler provides valuable services to manufacturers, producers, retailers and customers.
Services to Retailers:
(i) Financial Assistance:
Wholesaler provide financial assistance to retailers by selling goods on credit. This is done by allowing credit to retailers purchasing goods from them and makes payment to them after receiving money from their customers. This helps retailers to manage his business with small amount of working capital.
(ii) Meeting the Requirements :
Due to small and lack of space, a retailer cannot hold large variety of products. The wholesaler removes this difficulty by selling the quantity as and when the retailer, what he needs.
(iii) Introduction of New Products:
Wholesalers bring new products and their uses to the notice of retailers. Retailers get the benefit of specialisation and guidance from wholesalers.
(iv) Price Stability:
Wholesalers reduce price fluctuations by adjusting supply and demand and save the retailers from loss may occur due to price fluctuations.
(v) Economy in Transport:
A wholesaler often delivers goods at the door steps of retailers and save his time and cost of Transport.
(vi) Regular Supply:
Wholesaler keeps large stock of varieties of goods and provide a regular supply of goods as per the retailer's need. Retailers can purchase as much as they like, from time to time and need not maintain a large stock of goods.

Functions of Retailers:
a) Buying:
A retailer buys a wide variety of goods from different wholesalers after estimating customer's demand. He selects the best merchandise from each wholesaler and bring all the goods under one roof. So, he performs the twin functions of buying and assembling of goods.
b) Storage:
A retailer maintains a ready stock of goods and displays them in the shop.
c) Selling:
The retailer sells the goods in small quantities according to the demand and taste and preference of consumers. He employs efficient methods of selling to increase his sales turnover.
d) Grading and Packing:
The retailer grades the goods which are not graded by manufacturers and wholesalers. He packs goods in small lots for the convenience of consumers.
e) Risk-Bearing:
A retailer always keep stock of goods in anticipation of demand and bears the risk of loss due to fire, theft, spoilage, price fluctuations, etc.
f) Transportation:
Retailers often carry goods from manufacturers to their retail outlets.
g) Financing:
Some retailers grant credit facilities to his customers and provide the facility of return or exchange of goods. Door delivery and after sales service are provided by retailers.

Characteristics of Wholesalers:
(i) Collection of Goods:
A wholesaler collect the goods from manufacturer or producers in large.
(ii) Storage of Goods :
A wholesaler collects and stores them safely in warehouses, till they are sold out. Perishable goods like fruits, vegetables, etc. are stored in cold storage.
(iii) Distribution:
A wholesaler sells goods to different retailers. In this way, he also performs the function of distribution.
(iv) Financing:
(1) The wholesalers provide financial support to producers and manufacturers by providing money in advance to them.
(2) He also sells goods to retailers on credit. Thus, at both ends wholesaler acts as a financier.
(v) Risk Taking:
The wholesaler buys finished goods from the producer and keep them in the warehouses till the time they are sold and assumes the risk against rise in price, spoilage of goods and change in demand.
(vi) Grading, Packing and Packaging:
He classifies the goods into different categories. He grades the goods on the basis of quality, size and weight, etc. He also undertakes packaging of goods and also perform the functions of branding.
(vii) Providing Information:
Wholesaler provide valuable information to retailers and producers. The retailers are informed about the quality and type of products available in the market for sale, where as the producers are informed about the changes in taste and fashions of consumers so that they may produce the goods on the basis of taste and fashion.
(viii) Transportation:
A wholesaler arranges for the transport of goods from producers to his warehouse and from the warehouse to retailers. Many wholesalers maintain their own trucks, carries goods in bulk and adds place utility to the goods.

Retail trade is a trade that deals with the distribution of goods in small quantities to the end consumers. A retailer has been defined as "a trading intermediary engaged in the distribution of goods to the ultimate consumer".
Following are the characteristics of retail traders :
(i) Retailer generally involves dealing in a variety of items. A retailer makes purchases from producer or wholesalers in bulk for sale to the end consumer in small quantities.
(ii) Retail trade is normally carried on in or near the main market area.
(iii) Generally, retailers involve buying on Credit from Wholesalers and selling for cash to Consumers.
(iv) A retailer has indirect relation with the manufacturer (through wholesalers) but a direct link with the consumers