Direct channels are risky to firms and require that profits be shared with wholesalers.

Question

Quizplus · Accepted Answer

Direct channels refer to a distribution strategy in which the producer sells products directly to the end-consumer without the involvement of any intermediaries such as wholesalers or retailers. This means that there are no profits to be shared with wholesalers, and the riskiness of the strategy depends on factors such as the producer's ability to effectively reach and serve customers, as well as the competitive environment in which they operate. However, it should be noted that direct channels can be more costly to implement due to the need to build and maintain a sales and delivery infrastructure.

Direct Channels Are Risky to Firms and Require That Profits