Explanation should include defining channels of distribution as the path a product takes from producer to consumer. Channel members include intermediaries, wholesalers, rack jobbers, drop shippers, retailers (brick-and-mortar and online), and agents. Direct distribution takes place when the producer distributes directly to consumer; indirect distribution involves one or more intermediaries.

The channel is determined by the type of product (physical vs. virtual product; service companies; vending).

Process/Skill Questions: