question archive How geographical location can affect Amazon's distribution channels?
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How geographical location can affect Amazon's distribution channels?
Amazon's geographical location poses an inevitable increase in price of their products to their end-users. This is due to the high amount of investment used to train dealers and to cater for secure shipment of products to their end users.
Having a grasp of the different channels of distribution will give us an upper hand in how geographical location can affect Amazon's distribution channels. These are; wholesaler or distributor, direct sale (internet, catalog or through sales team), value added reseller, consultant, dealer, retail, and sales agent. Out of all these, Amazon's most preferred distribution channels are direct sale (internet) and dealer. Its global 75 fulfillment and 25 sorting centers which anchor the headquarters at Seattle (surrounded by water, mountains and forests) in Washington D.C. These centers aid mainly in the distribution of products within a certain radius in their areas of designation.
Geographically, Amazon is relatively disadvantaged. From its headquarters in Seattle, Amazon is tasked with selling their product to a geographical network of dealers who in turn sell to end users in their areas. This means that the dealers are essentially Amazon's customers. If this is so, Amazon has to train them through a strong program with marketing campaign and materials. This in turn raises the cost of the end product. Furthermore, if customers are loyal enough to rely on products from Amazon's headquarters, they will have to incur extra cost for the shipping of the products to their distant destination.