What is a Channel?

In the context of sales & marketing, "the Channel" is the chain of organizations that a product must pass through before a customer can buy it. The Channel is also called by many other names such as 'distribution network', 'supply chain' or simply as 'trade'.

It's best understood with an example:

A product is usually made by a brand* at a factory. The brand then sells this product to a national distributor which sells it to a state level distributor which sells it to a retailer which sells it to a customer. This is an example of a Retail Channel. Even within a retail channel, many variations are possible. In the Organized Retail business, brands may directly sell to the retailer. In other combinations - brands may sell to regional distributors, not national distributors. Regional distributors may sell to city distributors, not state distributors, and so on.

Other examples of channels are:

  • E-Commerce Channel
  • Door-to-Door Channel
  • B2B Channel etc.


* : The term brand is used generically. In cases of commodity or generic products - the product is made by a non-brand manufacturer.



Topics: Channel Management

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