Direct Channel

A direct channel is when your company ships the product directly to the customer, and your company owns the sales contract and retains rights to the receivable from the customer. Your end customer may be a retail outlet.

The movement to the customer may be direct from the factory, or the product may move through a distribution network owned by your company. Order information in this channel may be transmitted by electronic means.

4 benefits of using the Direct Channel:

  1. Increased control over the sales process and product distribution;
  2. Improved relationships with customers;
  3. Ability to offer customized products and services;
  4. Reduced costs associated with warehousing and inventory management.

The Direct Channel differs from other channels in that it involves a direct relationship between your company and the customer. In other channels, such as the Indirect Channel or the Wholesale Channel, there is a third party involved in the transaction, either in terms of shipping or sales

Related Links

Direct vs. Indirect Distribution Channel: What’s the Difference?