Speak about advantages and disadvantages of different forms of distribution channels.
 What do you think … ? Would you like to comment here? What are your views on?  | Asking for opinions |
| I’m convinced that … I feel quite sure that … It’s perfectly clear to me that … From financial point of view … I’m inclined to think that … I tend to favour the view that … | Giving opinions |
 I’m in complete agreement. I couldn’t agree more. Precisely. Exactly! | Agreement |
 I disagree completely. On the contrary. That’s not how I see it. I would not say that. | Disagreement |
 I agree up to a point but … I see your point but … I suppose you are right but … | Expressing reservations and doubts |
 I recommend that we should. I would suggest that we … | Neutral suggestions |
 It might be a good idea to … Have you thought of ___ing … What about ___ ing … We could always … | Tentative suggestions |
Forms of Distribution Channels
| Source Intermediaries or “Middlemen” | Advantages | Disadvantages | ||
| Distributors Buy and resell goods. Accept orders and payment. Assume warranty responsibility. May offer customer training. | Handle cultural, commercial, and technical problems. If delivery in United States, payment in dollars, standard terms. Simple handling of product defects. | Among the most costly sources; buyer pays both manufacturer’s and distributor’s profit and overhead. Probably foreign currency, L/C terms. (Letter of credit) | ||
| Manufacturer’s Representatives Accept orders on behalf of a source; receive commission for the service. May provide technical and commercial support. | Handle cultural, commercial, and technical problems. Generally less expensive to use than a distributor. | Payment in foreign currency. L/C terms if a foreign rep. company. Bears no warranty liability; little use in dealing with defects. | ||
| Brokers Bring together parties to a transaction for a fee. Services vary widely. | Least expensive intermediary. Wide range of services possible. May have wide contacts in the industry. Most willing to negotiate. | Least responsible for source or product performance, warranty. Probably little technical support. Foreign currency, L/C terms probable. | ||
| Trading Companies Broad scope of activities from brokering, representation, distribution, program management. | Worldwide contacts, broadest scope of sources. Experience and capability. Few cultural or language problems. | Generally a costly alternative. Most prefer to trade in existing markets or to make a market for new product, not to deal in isolated inquiries. Because of their scale, most buyers have little leverage. |
SUPPLEMENTARY UNIT
A new distribution model
This unit considers how supply chains will need to change in the future as a result of higher energy prices and concerns about carbon emissions.
Before you read
Discuss these questions.
| 1. | What are some traditional strategies and aims of running supply chains? |
| 2. | What new factors will companies have to take into account when designing their supply chains? |
| 3. | In what ways can a company reduce transport costs in its supply chain? |
| 4. | Think of as many ways as possible to reduce carbon emissions in freight transport. |
Reading