Which one of the following intermediaries typically take title to the products they distribute?

1. Career development
2. 4 Types of Channel Intermediaries

By Indeed Editorial Team

Published March 8, 2021

Channel intermediaries are the groups and individuals who make it possible for consumers to have access to products. A product's distribution process can vary based on the company that owns the item and the delivery method used to deliver the product to customers. Understanding what parties handle this process and how they distribute products can be helpful to anyone interested in working in marketing or distribution. In this article, we define channel intermediaries and intermediary marketing channels and list the main types of both.

What are channel intermediaries?

Channel intermediaries are the external groups, individuals and businesses that help a company deliver its products to customers. They act as agents between the original creator of the merchandise and the consumer who makes the last purchase. Companies need channel intermediaries in order to deliver goods to their customers, making them a vital part of the distribution process.

Who uses channel intermediaries?

Companies and product manufacturers use channel intermediaries to deliver their products to consumers without owning or being otherwise responsible for a supply train. With channel intermediaries, they can make a profit from their product before the final buyer purchases the item. These intermediaries provide logistic support and ensure that all buyers receive their products according to schedule.

What are the types of channel intermediaries?

There are four main types of channel intermediaries, including:

Agents

Agents act as an extension of the original manufacturers and represent the product's producer when trying to make a sale. Agents can be individual salespeople or entire companies. They work directly with customers to sell products and services. Agents do not possess any ownership in the original companies or the products they sell for them. Instead, they earn commissions from each sale they make.

This process sometimes includes convincing a consumer to buy the product by explaining its benefits and using other forms of persuasion. An example of an agent would be a car salesperson or a real estate agent.

Related: What Is Commission Pay and How Does It Work?

Wholesalers

Wholesalers buy a company's products in bulk and resell them. Unlike agents, wholesalers own the products they sell and make money by selling them to others. Often, wholesalers can make a profit because of the discount they receive for buying a bulk amount of products. They rarely interact with the final buyer of a product. Instead, wholesalers sell the goods to other merchants at a higher price point than what they spent to get the items.

Distributors

Distributors have a business relationship with manufactures and have partial ownership of the product they sell. Some distributors buy exclusive rights to buy a company's product to ensure that they are the sole distributor of that product in the area. Distributors often sell to wholesalers and retailers, creating minimal contact with the final buyers.

Retailers

Retailers purchase products from other channel intermediaries, such as wholesalers and distributors, to sell directly to consumers. Retailers can be small or large for-profit companies. They usually buy smaller quantities of products than wholesalers and distributors. Examples of retailers include grocery stores and department stores.

What are intermediary marketing channels?

While intermediary channels cover who delivers products to consumers, intermediary marketing channels explain how companies and intermediaries actually deliver the products. Essentially, intermediary marketing channels are methods of distribution. They typically refer to the business arrangement that manufacturers and intermediaries have with each other regarding the physical distribution of goods.

Read more: Guide To Distribution Channels

What are the types of marketing channels?

Types of marketing channels vary based on their method of distribution and who they involve in the process. The marketing channel that a company chooses can affect the availability and profit of its products. A company might make its decision based on a product's size, manufacturing process and cost of distribution. Typically, when the producers use more intermediaries in their distribution process, they are obligated to pay more fees.

Here are four common types of marketing channels that companies can use to distribute their products:

Direct selling

Direct selling refers to arrangements where the production company serves as its own intermediary. In this type of marketing channel, consumers order products directly from the manufacturer. Direct selling is a personal approach to selling products, as the manufacturer delivers products to consumers without a third party working as a liaison between them.

Examples of companies that use direct selling as a marketing channel include restaurants and locally owned farmers markets. Some online stores can also sell directly to consumers if the owner is the producer of the product they sell, such as an artist selling their artwork.

Indirect selling

Indirect selling is when a company uses an intermediary to distribute and sell its product. Indirect selling marketing channels can use varying amounts of intermediaries. In the most direct distribution route, the manufacturer can sell their product to an intermediary who then sells the product to a consumer. However, they may sometimes involve more than one intermediary in the distribution of a product.

This marketing channel encompasses many of the examples of intermediary channel uses, including shopping malls and chain retailers.

Dual distribution

Dual distribution is a marketing arrangement where the manufacturer uses an intermediary to sell their product while simultaneously selling it themselves. This marketing channel can give a manufacturer additional opportunities to make a profit from their product because they use multiple distribution channels.

An example of dual distribution is business franchising. This is when a company allows individuals to buy the rights to use their company name, reputation and business idea and run the business at a different location.

Related: 45 of the Best Franchises to Own

Reverse channels

A reverse channel refers to the intermediary marketing channel that repurposes used goods. In this scenario, the product originates from consumers. A company collects these goods from consumers and produces something new or refurbishes them for profit or another benefit. Companies that use reverse channel marketing can involve intermediaries in the distribution process or interact directly with consumers.

Thrift stores use this intermediary marketing channel. Another example of a reverse channel is a company that recycles goods to make new products, such as using recycled bottles to make plastic benches.

What intermediaries take the title?

Which of the following channel intermediaries does not take title to the goods that it sells?

Which combination of intermediaries are used to distribute the goods?

What are the 3 main types of intermediary?