What is commercial distribution?

The commercial distribution is a tool that allows companies to deliver a product directly from the market to the end buyer.

It is one of the elements of the 4P of the marketing mix and is defined as a set of institutions and marketing strategies operating to make a product or service readily available to the consumer for use.

In essence, commercial distribution concerns companies that produce their own products and make decisions related to the choice of distribution channels: the type of intermediaries, the number of intermediary levels to be placed between the producer and the consumer.

Types of commercial distribution

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The choice of distribution channel and marketing channels depends on the types of products and the characteristics they offer. Each distribution channel is defined as follows:

• Direct: when there are no intermediaries between the company and the final buyer;
• Short: when there is only one intermediary;
• Long: when there are multiple intermediaries.

Furthermore, if a company decides to use a channel with intermediaries, it must choose the most suitable distribution channels to achieve its set goals.

Hence, there are different types of commercial distribution that meet any need:

• Physical distribution: deals with the issues of transferring goods from production sites to consumption locations. It concerns all decisions related to the physical movement of goods: the choice of warehouses and sales outlets, the amount of stock to keep in storage. Through physical distribution, the company seeks to make continuously noting the presence of the product on the market;
• The intensive distribution: makes the product available in as many sales points as possible. This type is usually chosen for food products;
• The exclusive distribution: involves using a single intermediary for each geographical area, it is chosen for products such as cars, jewelry, high fashion clothing;
• The selective distribution: occurs when a company selects certain retail stores in a specific geographical area to entrust them with the sale of its products. This type of distribution is used especially for products that require sales points offering an adequate level of service.

The speed of delivery, added to a quality product, can be an advantage for the company that operates commercial distribution strategies to find an optimal balance between service quality and immediate use.

Important! The company must have the necessary stock to meet any type of need and request from a consumer. When a company does not have adequate inventory, it experiences out of stock (that is, stock shortage).