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Unit 29: Understanding Retailing

P2: Explain the process of distributing goods through different channels

Direct Channel (Producer to Consumer)
In this distribution channel, there isn’t any other wholesaler involved, as the producer
would be in direct contact with the customer from the end of production to the sale
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One-level Channel (Producer to Retailer to Consumer)
In this distribution channel, the retailers source their products directly from the
manufacturer and then sell it to the customers
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For example, Tesco
sources their berries worldwide, the majority being sourced from the Huelva Region
in Spain, as they want to ensure that the berries are of a high quality and also
ethical, as they want to ensure that through the Sustainable Agriculture Initiative, that
berry production is sustainable, and that growers have legal permits for land and
water, so this is the reason why they may source their berries from this specific area,
as it would tick all the boxes under price, quality and ethics
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For example, Tesco
sources a lot of their knitwear from Bangladesh, and they want to ensure that Tesco
and the manufacturers have transparency and help to support workers through
better working conditions
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Tesco may
transport worldwide sourced produce through planes, in order to get the produce to
Tesco quickly enough to keep the quality, or they may use shipping, to ensure a
more eco-friendly method of transporting produce internationally, so they may use
both systems for transportation
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Wholesalers buy produce from the manufactures in bulk,
then may store it in a warehouse and sells the produce to many retailers who would
then sell it to the consumers
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The
retailer (coffee shop) may go through different wholesalers, as they may not like the
prices of the wholesaler, or they may not like the quality, so therefore coffee shops
may take some time to get a main contact to source their products from
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