Distribution is the Activity of Connecting Producers and Consumers, Understand the Objectives and Types

Kapanlagi.com - Distribution is one of the three types of economic activities, besides production and consumption. Distribution has a very important position, as it serves as a link between production and consumption activities. Distribution also plays a significant role in the marketing process of a product. Without distribution process, the product may not reach the hands of consumers.

Such is the importance of the distribution process that it should not be done carelessly, let alone be skipped. Distribution is also an important process in the industrial world, as it can also have an impact on increasing the value of a good or product.

Distribution is part of the economic activities that are quite complex. Therefore, there are several things that need to be learned to understand what distribution is. Summarized from various sources, here is a review of the definition, objectives, and other things related to the distribution process.

1. Definition of Distribution

As mentioned earlier, distribution is the link between the production activities carried out by producers and consumption by consumers. Before reaching consumers, the distribution process will make the production goods available in the market. Therefore, distribution is also often interpreted as part of marketing activities. 

2. Distribution Objectives

Distribution plays a very important role in economic activities. Without distribution activities, production goods will not reach and be enjoyed by consumers or customers. Distribution is so important that this stage cannot be ignored. Broadly speaking, distribution activities are carried out with three main objectives. The three objectives of distribution are as follows.

1. To Reach Consumers
The first objective of distribution activities is to facilitate reaching consumers. Distributors or parties involved in distribution play a role in delivering or conveying production goods to consumers safely.

2. To Spread Products
Distribution activities can also be carried out with the aim of maximizing product distribution. With the right distribution strategy, product distribution can reach a wider and more even area.

3. To Maintain Production Stability
Distribution activities not only have an impact on the marketing process, but also on the production activities. Proper distribution will also maintain the stability of the production process.

3. Types of Distribution

In general, distribution activities are divided into two types. These two types have different characteristics and processes. Here are the two types of distribution.

1. Direct Distribution
Direct distribution is a distribution process where delivery or sales are done directly by the producer to the consumer. For example, farmers who sell their harvest directly to the community as buyers or consumers.

2. Indirect Distribution
Indirect distribution is a distribution process where delivery is done through a distributor as an intermediary agent. In fact, indirect distribution can involve more than one distributor. For example, goods are purchased by a wholesaler, then sold again by a retailer, and then purchased by the consumer.

4. Distribution Actors

Distribution is an important activity to ensure that production goods reach consumers. Distribution is carried out through a long process. In this process, there are several parties involved as actors. The actors in distribution are as follows.

1. Agent
Agent is a term commonly used to refer to a distributor or party responsible for distributing goods from the producer to the consumer. Agents usually receive profits in the form of commission.

2. Trader
Traders are parties who buy goods from the producer and resell them to consumers.

3. Exporter
On a larger scale, distribution activities can involve exporters. Exporters are parties who distribute goods from domestic producers to consumers abroad.

4. Importer
In addition to exporters, international distribution can also involve importers. Importers are parties who distribute goods from abroad to domestic consumers.

5. Broker
Brokers are parties who play a role in connecting producers with potential consumers, whether it be goods or services. Brokers do not invest capital in the distribution process they carry out. Brokers' profits are obtained in the form of fees from producers and consumers for their services.

6. Commissioner
Commissioners are parties who play a role in purchasing and selling on their own behalf.

5. Activities in Distribution

Distribution activities are very complex because they can involve many parties and must go through a long process. In addition, there are many activities within distribution. Some of these activities are as follows.

1. Activities of buying goods and services from larger producers or traders.

2. Activities of classifying products according to type, size, and quality.

3. Activities of introducing goods or services to consumers, including in the form of advertisements.

4. Good transportation and accommodation systems to deliver manufactured goods to a region.

5. Tracking or ensuring that manufactured goods arrive at the right time, in the right quantity, and in good condition.

6. Good product packaging process.

7. Tracking and determining the placement of products in such a way that there is maximum opportunity for people to buy them.

8. System for retrieving goods that have been circulated in the market.

That is a brief explanation and review of distribution as an important process in economic activities. Hopefully, it is useful and can increase knowledge.

(kpl/psp)