Choose a distribution channel
Compare direct selling with retailers, wholesalers and agents for a particular product and market.
Section 3 · Marketing
Cambridge IGCSE Business 0264, 2027–2029 syllabus, Topic 3. Apply each marketing choice to the stated customers, product and business constraints. Written practice is self-checked and does not certify exam readiness
Before you begin
- No previous marketing study is assumed. Identify the customer group, the business objective and the evidence in each situation before choosing a response.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
Which channel sells straight from a business to its customer?
What you will learn
- Recognise distribution channels
- Compare reach, control and cost
- Recommend a channel for a stated business
Place connects the product to its customer
A business can sell directly to customers or distribute through retailers, wholesalers or agents. A channel may include more than one intermediary.
Direct selling can give the business more control over the customer relationship and sales information, but it must organise the selling and delivery itself.
Intermediaries can extend reach
Retailers provide access to their customers but take a margin and influence how the product is presented. Wholesalers buy or distribute goods to retailers and may help reach many outlets. Agents arrange sales on behalf of a business under agreed terms.
Each intermediary can add cost or reduce control. Recommend a channel using customer access, product type, required service, volume and the business's ability to manage distribution.
Pause and explain
What is one possible advantage of using a wholesaler?
Worked example
A specialist craft maker wants to sell a fragile product to customers across the country but has no delivery network. What channel might help and what trade-off applies?
Show the worked solution
- A retailer may already reach customers and manage local sales.
- The maker can use its existing customer base.
- Consider the retailer's margin and presentation control.
Answer A suitable retailer could provide reach and established distribution, but the maker would share revenue through the retailer's margin and have less control over how the product is presented.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
A small jam producer sells at local fairs and wants national supermarket reach. Recommend one channel and two factors to check.
Give me a hint
Consider retailer access, production capacity and margin.
Compare my reasoning
- A supermarket retailer may give access to national customers.
- Check whether the producer can supply the required volume consistently.
- Compare the retailer's margin with expected sales.
The producer could approach supermarket retailers for wider reach. Before agreeing, it should check production capacity, quality and delivery requirements and whether the retailer's margin leaves a viable return.
Look for these in your work
- Channel named
- Capacity considered
- Margin considered
An online maker sells custom furniture directly to customers. Explain one benefit and one limitation of this channel.
Give me a hint
Consider customer contact and the workload of delivery and service.
Compare my reasoning
- Direct sales can provide customer feedback and retain the retail margin.
- The maker must manage orders, delivery and service.
- Large or complex items may add logistics challenges.
Direct sales may give the maker customer information and avoid a retailer's margin, but it must manage marketing, orders, delivery and after-sales service. Furniture size can make fulfilment costly.
Look for these in your work
- Benefit linked
- Responsibilities included
- Product context applied
A company wants an agent to sell to businesses in a new region. Distinguish the agent from a retailer and state one contract issue to clarify.
Give me a hint
An agent arranges sales for the business; a retailer usually resells goods to its own customers.
Compare my reasoning
- The agent represents or arranges sales for the business.
- A retailer buys and resells products.
- Clarify commission, territory or customer responsibilities.
An agent can arrange sales on the company's behalf, while a retailer generally buys and resells the product. The agreement should clarify commission and the agent's territory or responsibilities.
Look for these in your work
- Roles distinguished
- Channel relationship explained
- Relevant term identified
Common mistakes
- Assuming intermediaries only add cost
- Ignoring a retailer's access to customers
- Calling an agent the owner of the product
What can you explain now?
Which channel sells straight from a business to its customer?
Compare with the explanation
Direct distribution
The business sells without a retailer or wholesaler between them.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
What trade-off should a business consider when a distribution intermediary expands its reach?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.