What do you mean by 'channels of distribution'? What functions do they play in the distribution of goods and services? Explain.

Explanation

Channels of distribution are set of individuals and firms that take title or assist in transferring title, of particular goods and services as they move from producers to consumers. It refers to a team of merchants, agents and business institutions that combine physical movement and title movement of products
Functions of channels of distribution Channels of distribution smoothen the flow of goods by creating possession, place and time utilities. Some important functions performed by them are:
(i) Sorting It refers to the process of sorting the product into homogencous groups on thec basis of size, quality, features and price.
(ii) Accumulation It refers to the process of accumulation of goods into larger homogeneous stocks. This helps to maintain a continuous flow of supply.
(iii) Allocation It involves breaking homogeneous stocks into smaller, marketable lots. This helps in making sales easily according to different requirements of different buyers.
(iv) Assorting It refers to the process of combining various goods of the same line of product, for sale to customers such as a cricket kit containing a bat, a ball, gloves, wickets, stumps, helmet and leg guards.
(v) Product promotion Middlemen helps in the promotion of product by organising demonstrations, displays, contest, promotional events, etc. This helps in increasing the sale of products.
(vi) Negotiation Intermediaries usually discuss and decide the terms and conditions of sale, by negotiating the price, quality, guarantee, terms and conditions of delivery and payment, etc.
(vii) Risk-taking Middlemen usually bear risks on account of price and demand fluctuations, spoilage, destruction, etc, during the process of exchange.