Number of flashcards in this category: 17.
1.	breaking bulk		Sell large amount to a distributor (not end user, b/c end user doesn't need that much), so the distributor can break into smaller chunks and sell it where it needs to go.
2.	Li & Fung		- "sourcing" - you supply idea, they "get it done" - "own nothing" model: they just join together parts of the chain, but don't actually do anything. (management-like) - their value: knowledge and access to collaborators - delivering "store ready" if possible
3.	intensive coverage		- distribution through as many reasonable outlets as possible - low selling effort - easy to stock
4.	"the soft"		The value between cost of factory product and final retailing price. (Essentially, all the potential profit that can be gained.) Intermediaries (Li & Fung) try to snap up as much of this as possible.
5.	distribution trends		Growth in direct mktg. **Downstream power shift** retailers now have a ton of power.
6.	exclusive coverage		- through a single middleman/retailer - high influence on final sale price/style - high margins - limited reach - selection of only one middleman in each geographic area, usually involves an agreement
7.	role of distribution intermediary		Instead of three companies each having three customer contacts, each company has ONE intermediary who knows the three customers. One both ends, have to deal with fewer links and the intermediary handles them all. Pares down from 81 mil to 100,000 links.
8.	channel		A path that takes the product from producer to end user. Goal: efficiency
9.	corporate vertical mktg system		Combines stages of production under one management. E.g. own the fabric, design, manufacturer and retail outlets for a clothing comp. - Advantage: control every stage, can often maintain margins - Disadvantage: inefficient if need to produce high scales, expensive to expand, may still not unify goals across channels, reduces flexibility (you now have hard assets)
10.	selective coverage		- through multiple but not all reasonable outlets - less retail loyalty; but allows company to limit price competition - most popular, ability to avoid working with those wholesalers who make small orders, demand too much service, poor credit, don't do satisfactory job
11.	disintermediation		Cut out intermediaries (but still need their function) - e-commerce (cuts out some of the wholesaler/retailer part: self sale on own website) - channel commerce radiohead offers direct download. Many stores are being disintermediated.
12.	Place Example Companies		IKEA - cut out intermediaries. Walmart - power of retailer.
13.	channel conflict: vertical		producer: wants to sell most of own goods wholesaler: wants to sell most of goods retailer: wants to sell at the highest margin ^ Varying goals.
14.	% of cost that is distribution		30-50% of costs are distribution. Least flexible to change. Could take years to modify. (e.g. contracts betw. dealers and manufacturers)
15.	channel conflict: horizontal		Multiple outlets on the same level (like selling through grocery, versus warehouse/clubhouse.) Problem with maintaining business & margins.
16.	administered VMS		"detroit model" Tightly clustered and controlled suppliers. (You have strong influence and virtually tell them what to do in order to get you as a customer, but you don't actually own them.) - Basically run, but not own.
17.	intermediaries (4)		1. agents/brokers: negotiate sales between two companies (never actually takes the goods) 2. wholesaler: takes good and resells 3. retailers: sell to end users 4. facilitators: FedEx, UPS, never own the goods but plays a role in transporting them