A distribution channel is a series that a commodity passes through to get to the final user, which is the consumer (Cravens & Piercy, 2006). The series might be a business or intermediaries who ensure a product or a service reaches those it is meant to benefit. The series can be one of the following;
Internet
Wholesalers
Distributors
Retailers
Agents
It can either be short or long, in that, when sold from the producer to the consumer directly, it is a short, while long when passes through intermediaries. In most cases, the intermediaries receive the product or service from the producer at a low cost, and take it to the final user at a slightly high cost to earn a profit. Basically, distribution channels ensure that the product or service is available to the consumer when needed.
With the current high technology, many people are going for e-commerce as the safest and quickest distribution channel. Electronic commerce (e-commerce) is a commercial transaction that transfers information across the internet, meaning that the products move from the producer to the consumers, either indirectly or through the intermediaries with the help of the internet. E-commerce uses World Wide Web or e-mail to transact, ensuring that the products reach the final users at the right time (Gallaugher, 2002).
Since there is no physical interaction between the producer, intermediaries and the consumers, internet is used to connect them, and consumers select what they need from specific company and then order them by paying through PayPal or Western Union. If the advertising company is an intermediary, it requests the product from the producer and then the product is distributed by shipping, until it reaches the final user. The most types of shipping methods are U.S. Postal Service (USPS), United Parcel Service (UPS) and Federal Express (FedEx) (Singh et al., 2006). The shipment takes few days or hours according to the distance between the producer and the consumers, but consumers are usually happy when they receive the goods on time. Consumers are notified through the email when their product reaches each shipment, so as to collect it in time. E-commerce ensures that anyone can get any product from every corner of the world, and this increases marketability and product security.
The objective of any international business is to blossom for as long as it can. However, things do not go as always planned, and in some cases, international distribution channels are blocked. One of the key causes of blocking international distribution channel is competition. Every company has its own terms that define the amount of profit they are likely to make, meaning that they have a standard selling price strategy different from other companies. Some of the companies may sell similar goods at a lower price, and with extensive distribution channel, they may reach many people across the globe affecting the company that sells at a high price. Therefore, some companies will have no customers to sell their products to, and their international distribution channels will be blocked. (Ghauri & Cateora, 2010)
Besides, the availability of middlemen restricts the producers from distributing the product to the consumers through the available alternatives. Middlemen force the producers to sell their products at a lower price than they should, thereby registering a low profit that cannot maintain the production of their products. In other words, middlemen limit the inventories because manufacturers must provide an extra warehouse that will enable middlemen to carry out their inventories that only favors large companies. The end result is that the producers use more than they get, and this makes it difficult to comply with e-commerce regulations thereby blocking their international distribution channels.
When the international distribution channel is blocked, it is a blow to both the company and the country. The company makes its income from selling what they produce to the consumers throughout the world, because they can hardly depend on local sales. The only way they are assured to get returns for maintenance within the organization is through e-commerce. Therefore, the company is left without maintenance cost, salary to their employees, and lack of capital to buy inputs, and this may result to its closure. Again, the government gets the tax from such companies, meaning it will not get any tax when international distribution channels are blocked, and this lowers the country’s expectancy rate as well as low per capita income.
The best way to break these blocks is to eliminate middlemen by all means. For instance, the distribution channels in Japan has a high number of registered middlemen than in United States, meaning that the rate of blocking international distribution is high than in U.S. Another way to break these blocks is by establishing as many selling outlets as possible, especially by enabling e-commerce. This will ensure that consumers can order the product they require directly from the company, and this will increase security as well as making a higher profit. Besides, the producers can establish affiliate companies not only locally bit also internationally, to ensure that many their products are accessible by many people across the globe, eg. Magnifying glasses that can be found in registered optical stores in United Kingdom are readily available in many stores across United States (Barker et al., 2008).
References
Barker, A., Weissman, J. B., & Van Hemert, J. (2008, June). Eliminating the Middleman: Peer-to-Peer Dataflow. In Proceedings of the 17th international symposium on High performance distributed computing (pp. 55-64). ACM.
Cravens, D. W., & Piercy, N. (2006). Strategic Marketing (Vol. 7). New York: McGraw-Hill.
Gallaugher, J. M. (2002). E-commerce and the Undulating Distribution Channel. Communications of the ACM, 45(7), 89-95.
Ghauri, P. N., & Cateora, P. R. (2010). International Marketing (pp. 15-16). McGraw-Hill Higher Education.
Singh, S. P., Burgess, G. J., Singh, J., & Kremer, M. (2006). Measurement and Analysis of the Next‐Day Air Shipping Environment for Mid‐Sized and Lightweight Packages for DHL, FedEx and United Parcel Service. Packaging Technology and Science, 19(4), 227-235.
