A marketing channel is a way a business delivers its products to the consumers. Manufacturers or producers have to choose between two ways direct or indirect marketing channels. Both ways have both advantages and disadvantages. The choice on which distribution channel to use is determined by the many factors including financial ability, relationship with the third party and the ability of the third party. In the direct marketing channel, the producer sells goods directly to customers.

The channel is considered expensive and complicated to manage since it requires a substantial investment in vehicles and warehouses. The producer is, however, able to maintain a close relationship with the customers. Indirect channels occur when the producers use other people to sell the product to the customers (Kerin & Rudelius). Such third parties include retailers, agents, and dealers. Indirect methods offer the producer the ability to hire experts in distribution. The producer also does not have to bother about purchasing vehicles or renting storage space. The method, however, may cause the relationship between customers and manufacturers to deteriorate.

Goods increase in value as they move from the producer towards the consumer. The various changes that take place during the movement can be referred to as flows. There are different types of flows in distribution channels (Valenzuela). Product flow involves the actual or real number of time the product change hands from various parties to their ultimate consumer. An example of flow is the transportation of goods from producer to retailer then to consumer. Negotiation flow involves the strategies applied by varies parties to secure ownership of the goods. For example, price negotiation between a distributor and a retailer. Ownership flow is the movement of title from producer to other parties till the products reach the consumer (Valenzuela). The product title is acquired after products are acquired for example when a customer pays for a product from a retailer. Informational flow refers to the movement of information from any party in the channel.