State the Nature of Product - Choice of distribution channel
Nature of the product considerably affects choice of channel of distribution. In case product is of technical nature involving a good amount of pre-sale and after sale services, sale is normally done through retailers without involving wholesalers. However in most of the consumer goods having small value, bought frequently in small quantities, a long channel involving agents, retailers and wholesalers is used as goods need to be stored at convenient locations. Items such as toiletries, groceries etc. fall in this category. As against this in case of items like industrial machinery, having large value and involving specialised technical service and long negotiation period, direct sale is preferred.