What is Distribution? Definition, Type and Purpose

What is distribution? We often hear the word in the language of economics because distribution is one of the most important economic activities for supplying products and .services to an economy. Then what is distribution, and what kind of distribution is done in the financial world?

Distribution is one of the processes in an economic activity whose existence is very important. Distribution is part of the process of producing goods, where after the production of goods is completed, the next step is to distribute the goods.

In the article entitled What is Distribution? In this complete explanation, we will discuss the meaning of distribution, the purpose and the types of distribution that you must know. Check out our review below.

What is Distribution?

The word distribution itself has been recorded in Kamus Besar Bahasa Indonesia (KBBI), which says that distribution is a distribution which includes the distribution and delivery of goods to various places or several people. If interpreted in the language of the term, distribution is the distribution of goods determined under the portion and area of the producer to the consumer network.

The role of distribution is very important because, through the distribution process, an item will arrive in the hands of consumers at a predetermined location. In addition, the distribution process cannot be done arbitrarily so that there are no errors in the delivery of the goods being distributed.

With a distribution system, an item will reach consumers who are far away, even through a system that has been designed to distribute these goods. People who carry out goods distribution activities can be called distributors.

A distributor is a business actor who distributes goods with the aim of goods to a certain area. A distributor can work when getting an assignment from a manufacturer to distribute goods.

Distribution Purpose

Distribution, of course, has a purpose for why the distribution is done. Here are the distribution goals you should know about.

Distribute products and services to consumers.
Meet consumer needs.
Maintaining economic stability.
Increase product sales.
Provide benefits to consumers through the products sold.

Types of Distribution

There are several types of distribution that you should know about. Several types of distributions have their respective functions in them. The following are the types of distribution according to their respective explanations.

1# Intensive Distribution

distribution type of intensive distribution is a distribution that is carried out to distribute manufactured goods to retailers. The retailer will then resell the results from distribution to retail consumers.

To carry out this intensive distribution, the company must have a policy of selling goods with this system because not all types of production cannot be distributed with this intensive distribution. The types of products that can be done with an intensive distribution system are products that are easy to sell in the market and are selling well.

2# Exclusive Distribution

distribution This type of exclusive distribution is a type of distribution that is carried out to distribute goods in the maximum amount. To carry out this exclusive distribution, there must be

an agreement between the manufacturer and the retailer for mutual benefit.

An example of an entire distribution process is the sale of laptops from manufacturers who distribute them to stores as retailers through a cooperation system under a written agreement. This can be categorized as exclusive because laptop products cannot be purchased haphazardly directly from the manufacturer without a cooperation contract agreement from the retailer.

3# Selective distribution

distribution is a distribution process that is carried out through a selection process according to the distribution needs of the goods. Producers mostly distribute this to send goods to certain regions that sell well.

An example of this type of distribution is the delivery of products by producers, such as wheat staple foods that are supplied to certain countries whose staple food is bread made from wheat.

4# Direct Distribution

distribution Direct distribution is a type of distribution that is carried out not through a third party as an intermediary. This type of distribution is channelled by producers directly to consumers to cut sales costs.

Examples of direct distribution are mostly done by farmers, fishermen, and breeders who sell their products directly to consumers. A simple example is an oyster mushroom which sells its products daily to consumers.

5# Indirect Distribution

distribution Indirect distribution is distributed through third-party intermediaries to distribute goods from producers. This type of distribution can be done through individual services distributor companies.

Large companies mostly carry out examples of this distribution to distribute their goods. Gallon beverage products Aqua to entrepreneurs of minimarket shops or distribution of LPG gas products from Pertamina through agents appointed by Pertamina.

What is Distribution - Closing

Now you, of course, have understood what distribution is from the range of articles we have explained above. With the distribution process, it will certainly maintain economic stability in a region and country because of goods and services consumer needs are met.

This is our review of the article entitled What is Distribution? Definition, Type and Purpose. Hopefully, this article can add insight for you.

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