Factors affecting the choice of distribution channel

Choice of an appropriate distribution channel is very significant as pricing as well as promotion strategy are dependent upon distribution channel selected. Not only that, route which product follows in its journey from the manufacturer to consumer also involves certain costs. This in turn, affects not only price of the product but also profits. Choice of inappropriate channels of distribution may result in lesser profits for manufacturer and higher price from the consumer. Therefore, manufacturer has to be careful while finalising the channel of distribution to be used.