Benefits to the Channel

• In recent years, manufacturing companies that are not channel dependent and sell directly to the customer on-line have become prominent in many industries. When a customer chooses to purchase from such a company the entire channel of a dependent manufacturer suffers through lost sales, revenues, etc. Sometimes these new manufacturers compete on price, sometimes it’s simply on ease of purchase and availability of product. If the channel dependent manufacturer is able to compete on the same playing field as the non-dependent manufacturer, it will win more often than not, and the entire channel benefits. In many channel dependent industries goods may have to pass through multiple intermediaries before they end up in the hands of the end consumer. Each of these “touch” points represents an additional cost to transport, store, inventory, insure and track the goods. If the goods pass from the manufacturer to a single fulfillment source that can deliver it to the end customer, margins are increased, and ROI for the entire channel can increase.
  
• Fewer product touches also means fewer opportunities for theft, loss or damage.
  
• Smaller retailers have little to no negotiating power with respect to rates charged by national credit card companies. If all on-line purchases are funneled through a single source, lower rates can be charged which increases margins.
  
• Since on-line purchases are made through an outside independent party where all transactions are transparent and open for review, trust can be more easily established up and down the entire channel.

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