The Main Methods Used in the Selection and Substantiation of Distribution Strategies

Abstract

Based on an economic model, some comparisons have been made between distributional costs for two kinds of circulations: one long, employing agents, and another short, organized only with personal resources of the reviewed company. The model takes into account the nature and costs for each kind of circulation as well as the structure and nature of activities and responsibilities of each partner through the distributional strategy employed. This reveals the fact that employing one personal distribution circulation - vertical distribution system – is more efficient than the distribution by means of agents only when it starts with a certain level of the amount, and is more convenient in the long channel where the agent pays a large part of the fixed costs.