Marketing distribution systems used for products and services are not solely dependent on the product itself. What does this mean? It is how well distribution companies are used in marketing that contributes to the success or failure of a product or service. These marketing distribution systems include those manufactured by firms, how a distribution system is set up, and the legal arrangements that govern these types of systems.

When you are selling your products and services, you should be thinking about how you plan on distributing it. There are many ways that can be done, here I am going to explain a few of them.

Types of Distribution Systems in Marketing

Direct Distribution

Direct distribution is when a business sells its products to other companies. The business may be selling to retailers, wholesalers, or even other businesses that distribute goods. This kind of distribution is usually reserved for larger companies, because they have the resources to manage an extensive network of customers.

Direct distribution can be effective if you have a product that is in high demand and you can sell it at a price that will allow you to turn a profit while still keeping costs low enough that your customers can afford it. However, this type of distribution system requires significant capital investment and management ability. Direct distribution is the most common way of selling products, since it is the easiest and least expensive method. It involves directly selling products to retail outlets and customers. If you are using this type of direct distribution system, you will only have to pay for transportation costs and not many other costs associated with distribution.

Direct distribution is the most common way that businesses distribute their products. In this model, manufacturers sell directly to retailers, who then sell those products to consumers. It’s a simple system that has been in place since the beginning of commerce, and it still works well today.

Because this model requires less overhead than others and allows companies to reach customers directly, it’s usually more cost-effective than other models. However, direct distribution also poses some challenges. For example, if you want to reach a large audience with your product but don’t have the means for mass production or national distribution networks, then this option might not be right for you.

The main advantage of direct distribution is its simplicity and cost effectiveness. The main disadvantage is that it can be difficult for small-scale businesses to scale up quickly enough when they need to reach larger markets or more customers at once than just those who live nearby.

Indirect Distribution

Indirect distribution is a system where the manufacturer sells their products to an intermediary who then uses their own network to distribute the products.

The relationship between the manufacturer and the distributor is usually long-term and can be very formal or informal.

The distributor may also have a sales force that is responsible for selling directly to retailers or end consumers.

There are three types of distribution systems in marketing: direct, indirect, and internet.

Direct distribution is when a business sells its products directly to consumers. This is the most common form of distribution.

Indirect distribution is when a business sells its products to other businesses that then sell them to consumers. So a company like Amazon may have an online store where they sell their own products, but they also have an affiliate program where other people can sell their products and earn money from those sales as well.

Internet distribution is when a business sells their products through an online store (like Amazon) or through e-commerce websites like Etsy or eBay.

Intensive Distribution

Intensive distribution is the most expensive of the three types of distribution systems. It involves a high-cost, high-volume approach to marketing. A business using intensive distribution will have a large number of retail locations and/or employ a large sales force to sell their product.

The advantage to this type of distribution system is that it allows businesses to target specific customers and reach them in areas where they are most likely to purchase the product. The disadvantage is that it can be costly for businesses to implement an intensive distribution strategy.

Intensive distribution is a type of distribution system in marketing that requires the seller to invest more capital and effort into the production, transportation, and delivery of its products. This type of distribution has high costs, but it also allows for greater control over how products are distributed.

There are several types of intensive distribution:

-Direct sales: The seller takes responsibility for selling their product directly to consumers.

-Selling through third parties: The seller sells their product through an intermediary such as a wholesaler or retailer.

-Consumer self-service: The seller offers consumers the option of purchasing products online or at a store without having to interact with a salesperson.

Selective Distribution

Selective distribution, also known as vertical distribution, is the most common type of distribution system for marketing products. Selective distribution involves a manufacturer selling products to distributors who then sell them to retail stores or directly to consumers.

This type of distribution system is typically used when there are a limited number of buyers in a given geographical area, allowing companies to focus on those specific markets.

The Selective Distribution System is a system that uses a selective strategy to distribute goods and services. This means that only certain retailers are allowed to sell the product or service, and they must be approved by the manufacturer. This is a very common practice for luxury brands, but it’s also used by some companies who want to maintain control over their brand experience. For example, Apple does not allow any third-party resellers for their products (though you can buy them through Amazon).

Advantages of the Selective Distribution System:

  • Control over your brand experience
  • Better customer service from authorized retailers
  • Higher profit margins because you’re not paying commission to other companies

Exclusive Distribution

This is when a company sells its products through a single distributor. When you have an exclusive distribution, the company that makes the product has no other choice but to work with a distributor to get it out there. The advantage for the manufacturer is that they can control what goes on in the distribution process, and keep all of their profits. However, this also means that they are limited by the distributor’s abilities and reach.

It’s important to note that exclusive distribution is not necessarily a bad thing—it just requires careful planning and consideration of your options.

In the exclusive distribution model, a manufacturer sells its products exclusively through one distributor. This is a common arrangement for large companies that sell a wide variety of products, because it allows them to focus on developing and marketing their products, while the distributor handles the day-to-day business of getting those products into stores. The manufacturer does not have to worry about managing multiple distributors, so it can focus on its core competencies.

The distributor benefits from this arrangement as well. It gets access to high-quality products at wholesale prices and has no competition from other distributors in its territory. However, the distributor may need to invest heavily in infrastructure and personnel before it can handle all of the orders coming in from retailers in its territory.

Takeaway: Selective distribution seems to be the best for companies with well-known products.


In the end, no matter what products or services you’re distributing, it’s crucial to understand the different types of distribution systems and how they can best benefit your business. From a fulfilment and inventory control standpoint, not all distribution systems are created equal—almost any company would benefit from learning more about these models and deciding which works best for them. The choice of distribution system is dependent on the product, the market and the geographical area. It should also be selected with regards to handling costs, competition in the field, profits required and desired turnover. There are certain guidelines that must be followed to achieve maximum results from a distribution system. All necessary systems should be coordinated; be properly supervised and have adequate and reliable facilities.

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