Distribution Channel of

SATHIYA SORUBAN.E

II nd Yr MBA

What is DISTRIBUTION ?

• Right product• Right quantity• Right place• Right time

CHANNEL ????

“HOW”

The major functions include

• order processing• warehousing• inventory management• transportation

HI(STORY)

-founded in 1994 as by Jeff Bezos

-the global leader in e-commerce

1995 the company went online 

pioneer in electronic commerceTo build the world’s most customer–centric companyTo establish a place where customers could buy anything

went public 1997

“GET BIG FAST”increase the revenue per customer

Timely shipment satisfied customers improved market share repeat business

based in Seattle, Washington

Cntd…• Initially…online book retailer…

no warehouse-no stock located close to INGRAM’s BOOK GROUP

-physically handle and ship the books

• Growth in domestic and international volumes• Amazon had to share its profit margins with Ingram• Ingram’s distribution capacity supports many other

booksellers. Service issues for Amazon during peak demand

- had to increase inventory levels and obtain strategically located distribution facilities

TimelineAmzon.com launch -1995-

Music&video store launch

-1998- Planetall,Junglee.com,bookpages.co.in

-1999- IMDB

3rd party selling -2003- CDnow

Partner-toysRU -2004- Joyo.com

Amazon publisher -2005- Booksurge

Partner-Target -2006- Mobipocket

Borders bookstore -2007- Shopmob

Amazon auctions -2008- DPreview

Kindle launch -2009- Abebooks, Audible.com, bookfinder.com

Homegrocer-amazon fresh

-2010- Zappos, drugstore.com

Carsdirect.com -2011- Bookfinder.com,Woot, Quidsi,

-2012- Kiva systems

PRODUCTS

BooksMovie, Music and GamesDigital DownloadKindleComputer And OfficeElectronicsHome and gardenGrocery, Health and beautyToys, kids and babyClothing, Shoes and jewelrySports equipment and wearsTools, Auto and industrial

Five international stores of Amazon.com

Amazon Canada, Amazon France, Amazon UK, Amazon Japan, Amazon Germany.

Reasons: The Mother-Tongue Issue The Shipping Issue The Currency Issue The Local Product Issue The National Pride IssueProper inventory control

Marketing Domains

1. Business to consumer (B2C)

2. Business to business (B2B)

3. Consumers to Consumers (C2C)

4. Consumers to Business ( C2B)

Distribution Channel-Digital

Distribution Channel-

On-line channel has significant cost benefit

-E-Books-Kindle reader-AmazonMP3 & Cloud Player-Instant Video-Mac Dowloadstore-AppStore for android-Amazon Cloud drive-Amazon Game Studios & Softwares

Distribution Channel-Physical

Distribution Channel-

• Centalized distribution centers• States and places of Tax Advantage

– Faster response time– Lower transportation cost

• Use a hybrid approach in stocking and pricing

• Pricing varies for delivery options• Supply Chain Strategy

– Pure pull– Pure push– Push-pull

-most advanced order processing and fulfillment operations

"Amazon's goal is to collaborate with our suppliers to increase

efficiencies and improve inventory turnover,"

WHOLESALER

AMAZON.COM

CUSTOMER

INFORMATION

INFORMATION PRODUCT

PRODUCT

-Large quantity of small parcels and

packages are involved in

e-commerce related merchandise

-variety of delivery options, including

overnight and various international shipping

options

WHOLESALER

AMAZON.COM

CUSTOMER

INFORMATION

INFORMATION PRODUCT

PRODUCT

Direct Purchases

WHOLESALER

AMAZON

CUSTOMER

INFORMATION

INFORMATIONPRODUCT

PRODUCT

PUBLISHER/SUPPLIER

INFORMATION

gets paid before paying the distributor

WHOLESALER

AMAZON

CUSTOMER

INFORMATION

INFORMATIONPRODUCT

PRODUCT

PUBLISHER/SUPPLIER

INFORMATION

Distributer/manufacturer

CUSTOMER

INFORMATION

INFORMATION

PRODUCT

Drop-shipping channel

SELLERS CENTAL

WHOLESALER

AMAZON

CUSTOMER

INFORMATION

INFORMATIONPRODUCT

PRODUCT

PUBLISHER/SUPPLIER

INFORMATION

Other Sellers

INFORMATION

-highly automated pick-pack-ship processes

WHOLESALER

AMAZON

CUSTOMER

INFORMATION

INFORMATIONPRODUCT

PRODUCT

PUBLISHER/SUPPLIER

INFORMATION

Other Sellers

INFORMATION

A Plethora of Approaches

• Outsourcing / 3 PLs• Bar-Coding / RFID• Collaborative Transportation Management• Just in Time Inventory• Vendor Managed Inventory• Quick Response• Collaborative Planning, Forecasting and

Replenishment• Activity Based Costing• Build to OrderPartnerships / Alliances• Auctions / Exchanges

Amazon has developed an extensive global distribution network that continues to grow at a frenzied rate.

‘When you think of web shopping, you think of Amazon ’

THANK

YOU