After its components are in place, however, a direct channel is likely to be more economical and efficient in operation than an indirect channel. Direct channels tend to be expensive to establish, sometimes demanding substantial capital investment in warehouses, logistics, transport vehicles, and driving staff.
You cannot easily sell as much of your product on your own, as you could if you used a large distribution network.Another disadvantage commonly associated with tangible products sold via direct channels of distribution is that the customers are usually asked to bear the shipping costs, which becomes an inconvenience for them.

The expense will be proportional to the scale of your business, but the process becomes more complex, as the business grows. Let's review.
The producer may hire traveling salesmen who go out to the field where the consumer is and try to sell the product to them on the spot. She may set up a website to market and sell her wares. However, a company that is responsible for the sale, transportation and delivery of its products directly to the customer is using a direct channel of distribution.Small businesses in particular may find it more cost effective to use a direct channel of distribution, since they may not have the financial resources to hire others to take care of their marketing, sales, shipping or delivery needs. Expenses could be limited to website hosting, show entrance fees and display space, transportation and perhaps some shipping costs.Direct channels of distribution also allow owners to maintain control over certain aspects of their business. If it passes directly from the producers hands to the consumer’s hands, then that is a direct distribution channel. Lesson Summary. Consider an artist who specialized in making handmade pottery. Your distribution channel is the series of businesses, sellers, or other intermediaries your products must go through to reach your final consumers. If the product is portable enough, the salesmen will carry it with them and try to sell them directly to consumers. They also eliminate in-store competition with others who sell similar products. If it is not a product that the salesmen can travel around with then the producer will have to arrange for its delivery to the customer as soon as a sale is closed.Take a company that is selling vacuum cleaners, for example. It is difficult for a direct distribution channel to compete with such an extensive network. Although you save money by not paying someone else to distribute your goods, you still need to make an investment in getting your product into the market, especially for larger scale companies, in particular. The first step toward understanding what a direct channel of distribution offers - also known as a direct marketing channel - is to understand what a channel of distribution is. She also studied business in college. Since the internet, a lot of things have been made easier, and direct channels of distribution have become much more common in business.Usually, a product will pass through a certain number of hands before it gets to the consumer. It will establish branches at every major consumer center and have a sales force that goes from door to door, selling the vacuum cleaners. Generally, direct channels have the shortest distance and are the simplest distribution channel. 1. Direct selling makes it easy to move your goods to the customer pretty quickly to ensure their satisfaction.You also get to eliminate middlemen and their markups, so that your goods arrive at the consumers’ doorsteps at much cheaper prices.

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