Merits of Direct distribution

1. Control over selling policies

It is the manufacturer who has direct and full control over sales policies and strategies which can be taken for the benefit of both the firm the consumers where intermediaries do not have say. Thus, price policy, discount policy, credit policy, service policy and the like can be designed to the mutual benefit of manufacturer and the consumers.

2. Best suited for consumer durables

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The products which are generally called as shopping and specialty goods which are high priced, durable and enjoy require features, need good deal of consumer education of these features, merits, benefits and care. These are the products where unit profit margin is high. These require heavy doses of sales efforts at the point of sale. Hence, it is the direct selling that is more paying than indirect methods.

3. First – hand information

The success of a producer or a manufacturer depends on his ability to keep in touch with the authentic latest and first hand information about the changing dimensions of market namely, consumer number and likes and dislikes, so that his product or products can be moulded to the requirements of consumers. Such first hand information he can get when he is very close to the consumers. Thus, it is the direct distribution system that makes possible better and clearer understanding of consumer and producer problems for mutual benefit. In caser of indirect system, the communication gets delayed and biased to the detriment of both the producers and the consumer where middlemen meddle with the free flow of the information.

4. Cash dealings

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in modern days, one can not think of hundred personality cent cash sales. Credit sales are as must as these are the days of credit economy. One can not be so rigid as to the terms of deal as purely on cash basis. It is because; there prevails competition and not the monopoly. Even if you are strict, the competitors capitalize on it by granting liberal credit and compete away your business. However, there are greater and better chances of increased cash sales in case of direct distribution than in case of indirect distribution system. Instead of giving credit to wholesalers and retailers and fabulous discount producers can sell on cash basis to the consumers at much lesser prices. As a result, both producers and the consumers are happy.

5. Sale in bulk quantities

There are many articles which are termed as ‘office’ and factory supplies where unit prices are low and even the profit margin is low, but are bought in bulk. The examples of office supplies are various kinds of paper, links, pencils, carbons, ribbons, oils, gums, staples, eraser, lack, blank tape or cassettes and the like. The instances of factory supplies are cotton waste, furnace oil, acides, chemicals, liquid soaps, bleaching powders, napkins, towels and the like. Normally, these are the items which are bought by institutional buyers in bulk mostly once or twice a year. Here, the direct distribution is worthwhile to try and gain than to leave the things to the intermediaries.