Business value gained by consolidating to a single web site
In the first example there are 5 manufacturers and 20 retailers.If each manufacturer sells directly to each retailer, there are 100 contact lines—one line from each manufacturer to each retailer.In fact geographic and other constraints might eliminate some lines of contact, making the channels of distribution more efficient.
In addition, large and small businesses may make their purchases through other outlets. The simplest is a two-level structure in which goods and services move directly from the manufacturer or provider to the consumer.Two-level structures occur in some industries where consumers are able to order products directly from the manufacturer and the manufacturer fulfills those orders through its own physical distribution system.In a three-level channel structure retailers serve as intermediaries between consumers and manufacturers.In a four-level structure retailers order goods from wholesalers rather than manufacturers.
Finally, a manufacturer's agent can serve as an intermediary between the manufacturer and its wholesalers, making a five-level channel structure consisting of the manufacturer, agent, wholesale, retail, and consumer levels.
Intermediaries allocate products by breaking down a homogeneous supply into smaller units for resale.