Market factors or consumer factors: the following market or supply characteristics influence the channel decision:
A. Consumer or industrial market: the producer of consumer product may choose a long channel invoving wholesaler and the retailers depending upon the nature of the product. In case of industrial product the channel is comparitevly short because retailers' services are not required in such cases.
B. Geographical distribution: where of customers are geographically dispersed. If the channel may be long. In contract, if they are concentrated, the direct selling may be done.
C. Number of purchases: when the number of consumers is large, the channel may be indirect and services of the wholesalers and retailers become necessary. But, if customers are few, direct sale can be entertained through representatives.
D. Size of the orders: where customers are purchase small quantities frequently and reguraly. Length their marketing channels are indicated. If the size of the order from the customer is large, the channel may be shorter.
E. Policies of competitions: the channel decision is also affected by the policies of the competitors in this regard. If most of the competitors are distributing their products through middle man, the enterprise should also decide to do so. If the competitors do not engage any middle man, company should also distribute its goods direct to the consumers.
F. Customer buying habits: customer's buying habits also affect the channel decision. If the customers expect credit facilities, desire to purchase all necessaries at one place or desires for the personal services of the salesman, the channel may be lengthier or shorter dependent upon the capacity of providing those facilities and meeting out of the needs of the customers. Producer can afford those facilities, the channel will be shorter otherwise lengthier.