Zero level channel

By using the zero level channel of distribution the products are delivered from the manufacturer directly to consumer. The products being sold by using this type of the distribution are usually very expansive, technical, high value products. Technical high value products can also be bought online and then delivered directly to consumer. In this case manufacturer saves the costs of transporting the goods to the retailers. Because of the high cost of transport and because retailers may charge a higher price, the products may become very expansive. When the products are delivered directly from the manufacturer to consumer, manufacturer usually uses a transport agency, like DHL in order to deliver the goods. In this case the costs of transport are not as high, and the products don’t go to the retailers. By saving costs of transporting the products, manufacturers can charge lower prices.

In some cases the consumer may actually be asked to come to the factory in order to receive his product. For example, Ferrari and Porsche car buyers can actually come to the factory in order to receive their products. They are usually allowed to go into the factory and see how their products are actually being made. It gives a consumer a great experience of visiting a factory, but at the same time gives a manufacturer an opportunity to save the costs of transportation these cars.

Another example of people who sell the products or provide the service directly to the consumer is hairdresser or electrician. They sell their services directly to consumers without encouraging any other agencies. Nowadays we also have ‘e-tailers’, who do the same job as retailers, but using internet, using TV shops or telephone sales. For example, you can now buy a TV online on the internet Amazon, instead of going to the normal shop. There are already many companies like Amazon or EBay on the market which do e-selling. Normal retailers have many physical shops, which means they have higher costs of running these shops e-tailers. They do have some stores near their customers in the city, in order to make sure it is easy to deliver their products on time, and that they always have some in stock in the store.

Nowadays we also have ‘e-tailers’, who do the same job as retailers, but in the internet. For example, you can now buy a TV on the online shop on Amazon, instead of going to the normal shop. Normal retailers have many physical shops, which means they have higher costs of running these shops, than for e-tailers…….