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Multi-channel Distribution

Level:: AS, A Level

Board:: AQA, Edexcel, OCR, IB

Last updated 22 Mar 2021

Multi-channel distribution involves a business using more than one type of distribution channel.

Multi-channel distribution is increasingly common. For example, a high street retailer might now also distribute directly to customer using e-commerce and perhaps also using catalogues sent via direct mail. A manufacturer might use indirect channels such as retailers and distributors as well as selling directly to customers using e-commerce.

Apple is a great example of multi-channel distribution in action:

The main benefits and potential drawbacks of using multi-channel distribution include:

Benefits of Multi-channel Distribution

Allows more target market segments to be reached
Customers increasingly expect products to be available via more than one channel
Enables higher revenues – e.g. if retail outlets have no stock, but customer can buy online

Drawbacks of Multi-channel Distribution

Potential for channel “conflict” –e.g. competing with retailers by also selling direct
Can be complex to manage
Danger that pricing strategy becomes confused (in the eyes of customers)