Channel Intermediaries: Definition
How does a consumer go about purchasing a product? Do they knock on the door of the producer? Most products are purchased from channel intermediaries whose main purpose is to deliver product from the manufacturers to the end users. The purpose of a channel intermediary is to move products to consumers, whether business or consumer. Some intermediaries take title, or ownership, of the product from the producer. This means that they can set the price and control the final method of sale. This would be an example of a retailer.
When Ninja Corp first decided to launch their product line, they had to determine which channel intermediaries they would need to effectively reach their target market. Remember that the overall marketing mix consists of the 4 Ps (which are product, promotion, price and physical distribution). This lesson discusses the P of physical distribution through the channel intermediaries.
Merchant Wholesaler
Merchant wholesalers are institutions that purchase goods from producers and then resell them to other businesses, wholesalers or retailers. They can receive the title of the product from the manufacturer, hold products for inventory and then later resell them. Merchant wholesalers' customers usually consist of small- or medium-sized retailers. Ninja Corp also uses merchant wholesalers to help distribute their products to retailers that their smaller corporate trucking company can't reach.