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Thread: Reasons for using intermediaries in distribution

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    New Member daiesk's Avatar
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    Question Reasons for using intermediaries in distribution

    its a syllable dot point i have zip notes on :P could anyone help me out with a few reasons? thanks

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    aka biomic
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    Intermediaries, especially in global trading, may have better knowledge of the market than yourself and as such are better catered to redistribute products (indirect exporting). Selling a business' product or service to an indermediate market is also an efficient means of gaining a reputation, therefore intermediaries (if they are resellers) must be carefully selected. They do take a commission from sales, and as such, a business should bear this in mind when budgeting to ensure that sales made through an intermediary are not mistakenly recorded as 100% profit.
    Intermediaries may also have access/alliances with a greater array or number of retail outlets, therefore regardless of whether your product is to be excusively or thouroughly distributed, an intermediary can direct as required.
    Probably the main point however is the exosure an intermediary has. Consider Apple, their products were once exclusively distributed in their own retail outlets, however recently they have expanded their market and re-imaged to appeal to a wider consumer market through offering products in a greater number of retail chains (eg: Dick Smith)
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    Also economies of scale(if that works :S) from intermediatries that distrubte more then 1 business's products.

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    Junior Member seremify007's Avatar
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    Think of it this way- it's a challenge if you don't knock jack crap about distribution, so why not get a distributor who knows what they are doing? It could lead to lower costs, more efficient distribution, and it also saves you from having to do it... and as mentioned earlier, some companies have bucked the trend- Apple defied Adam Smith and showed that a company can achieve great success by doing the exact opposite of specialisation.

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