Place (channels of distribution) — FAQ

This is a common point of confusion. Selling through the Amazon Marketplace is an indirect channel. Amazon acts as a powerful online retailer and intermediary, providing access to its vast customer base, warehousing (Fulfilment by Amazon), and delivery network in exchange for fees and commission. The producer is not selling directly to the end consumer in a one-to-one relationship; Amazon is the intermediary facilitating the transaction.

Not necessarily, although it often does. Each intermediary adds their own profit margin, which can increase the final price. However, intermediaries also create efficiencies. A wholesaler, by buying in bulk and distributing locally, can reduce transport costs for both the producer and the retailer, which might offset their margin. The key is whether the value the intermediary adds (e.g., convenience, market access, reduced transport costs) is greater than the cost they add to the chain.

No, this is a significant misconception in A-Level Business. 'Place' refers to the entire channel of distribution – the complete journey from factory to consumer. While a physical shop is one component of one type of channel, 'Place' also encompasses e-commerce websites, direct mail, telesales, wholesalers' warehouses, and the logistics network that connects them all. It is about making the product accessible and available, not just a single physical location.