A channel structure refers to the way in which a company distributes its products or services to customers. It is the network of intermediaries, such as wholesalers, distributors, and retailers, that a company uses to bring its products or services to market.

There are several types of channel structures that companies can use, including:

1. Direct distribution: This involves selling products or services directly to customers, without using intermediaries. This can be done through a company’s own retail stores, online sales platforms, or by selling directly to businesses.
2. Indirect distribution: This involves using intermediaries, such as wholesalers or distributors, to reach customers. Indirect distribution can be used to reach a wider range of customers, or to tap into established distribution networks.
3. Multiple channel distribution: This involves using a combination of direct and indirect distribution channels to reach customers. This can be an effective way to reach a wider range of customers, or to cater to different customer segments.
4. Omni-channel distribution: This involves using a variety of channels, including online and offline channels, to reach customers. This can provide customers with a seamless shopping experience, as they can purchase products or services through the channel of their choice.

Overall, companies need to carefully consider their channel structure in order to effectively reach their target customers. Choosing the right channel structure can help a company to increase sales and grow its business. Here are some illustrative examples.

Direct

Selling directly to the customer using channels such as personal selling, retail or wholesale. For example, a fashion brand that uses its own shops, websites, and social.
producer → customer

Retail

Selling to retailers who sell to the end-customer.
producer → retail → customer

Value Added Reseller

Selling to firms that add value to your products or services before selling them. For example, a firm that sells components that are used in mobile devices.
producer → value added reseller → customer

Wholesale

Selling to wholesalers who distribute the product to retailers and sometimes direct to consumer (DTC).
producer → wholesaler → retail → customer

Agents

Using agents or brokers to manage your sales to wholesalers, retail and/or ecommerce sellers.
producer → agent → wholesaler → retail → customer

Complex

It is common for organizations to have many channel structures for different products and regions. For example, a fashion brand that sells direct in the United States but uses agents, wholesalers and retailers in other countries.
United States
producer → customer
France
producer → customer
producer → retail → customer
Japan
producer → agent → retail → customer
producer → agent → value added reseller → customer

Detailed

Channel structures may include details such as the types of channel that are involved. For example, a direct producer → customer structure might be expanded out with more details:
United States
direct retail → flagship → customer
direct retail → brand shops → customer
direct retail → outlet shops → customer
direct sales → customer

Market expansion is a business strategy that involves increasing the reach and presence of a company’s products or services in new or existing markets. This can be achieved through a variety of methods, such as entering into new geographic regions, expanding the company’s target customer base, or offering new products or services.

There are several reasons why a company may choose to pursue market expansion. For example, a company may be looking to increase its sales and profits, diversify its revenue streams, or enter into new markets to reduce its reliance on a single market or customer base.

There are several methods that a company can use to expand its market presence. These include:

1. Entering new geographic regions: This can be done through a variety of methods, such as opening new physical locations, establishing distribution networks, or entering into partnerships with local companies.
2. Expanding the target customer base: A company can expand its customer base by targeting new demographics or offering products or services that appeal to a broader audience.
3. Introducing new products or services: A company can expand its market presence by introducing new products or services that meet the needs of new or existing customers.
4. Acquiring other companies: A company can also expand its market presence by acquiring other companies that have established customer bases or distribution networks in new markets.

There are a number of risks and challenges associated with market expansion, including the cost of entering new markets, the need to adapt to local cultural and regulatory differences, and the risk of increased competition. It is important for companies to carefully evaluate the potential benefits and risks of market expansion before making a decision to pursue this strategy.

Consumer Service to Business Service
A movie theater rents out theaters during business hours for events, conferences and meetings.

Consumer Service to Consumer Service
A cafe in a business district is only busy on business days. In order to increase revenue on weekends they host community organized events such as a repair cafe.

Consumer Product to Business Product
A mobile device that is mostly purchased by consumers develops office productivity apps and begins to sell directly to businesses with personal selling techniques.

Customer Product to Consumer Product
Selling a product to a new market to serve a different customer need. For example, selling packages of baking soda as an air freshener for a refrigerator.

Customer Product to Consumer Service
Offering a product as a service such as a solar panel system that is sold as a utility service with a monthly electric bill as opposed to a upfront purchase of the system.

Business Service to Consumer Service
A corporate catering service begins to target weddings and other private events.

Business Service to Business Service
A customer service outsourcing firm begins to sell its service for internal processes such as an IT help desk that serves internal customers of a firm.

Business Product to Consumer Product
Marketing business products such as high-end office chairs known for their ergonomics to employees working from home.

Business Product to Business Product
Finding a new use for a business product. For example, offering to brand standard office stationery such as sticky notes such that they become promotional items that can be given to clients.

Business Product to Business Service
Offering business equipment with leasing, maintenance, management and other value added services. For example, selling a coffee service as opposed to a coffee maker.