Distribution Models

There are essentially five ladders of distribution. These are often called tiers. Just to confuse matters, the number of steps is one less than you'd expect. The manufacturer's ground floor doesn't count. Thus, a two-tier model goes PRODUCER O DEALER O END USER. Pre-sales and regional office staff and sales commissions paid internally are counted as part of the Producer's activity.

Table 15-1 shows the different distribution models.

Table 15-1

Distribution Models

Direct

Two-Tier

Three-Tier

International

Multi-Tier

Producer

Producer

Producer

Producer

Producer

End User

Distributor or Dealers Distributor

Importer

Level-1

End User

Dealer

Distributor

Level-2

End User

Dealer

Level-3

End User

Level-4

End User

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