There are numerous functions performed by channel members. All of these function utilize scarce resources of the organization. Furthermore, these functions can be better performed through specialization in the function or through expertise of the function. And on top of it each function can be transferred within the various channel members.
Main functions of channel members in channel distribution are
- Risk taking – Assuming the risk connected with carrying out channel work or being a part of a channel
- Financing – Acquiring funds to finance for inventories
- Physical distribution of goods – Storage and movement of physical goods
- Negotiations – Reaching an agreement on pricing and other terms which may be a part of the transaction
- Matching – Placing order with the manufacturers and matching the orders to the actual requirement.
- Contacts – Maintaining contacts with existing customers as well establishing contacts with potential customers and maintaining the same with the regulatory bodies
- Promotions – Carrying out effective communications to stimulate purchasing
- Information – Gathering information about potential customers, competition as well as tracking the environmental factors
As we can see, the more specialized a channel member is, the better he will perform in any of the above given functions. Also the functions are such that they can be shifted within various channel members.