What is the distribution channel model?

The distribution channel model is simply divided into long channel and short (flat) channel; Channel strategy mainly refers to the strategies and methods adopted in channel expansion according to the enterprise's own situation, product positioning and advantages.

My understanding is that Haier has adopted both channel models. For example, they enter Gome, Suning and other hypermarkets with little or no channel classification (such as Dell's direct sales model). Short-term channels are conducive to the company's profit maximization and product price advantage. The company can get feedback from the market quickly; Long-term channels, such as Haier's agents at all levels in the country, generally include provincial, prefecture-level and even county-level agents, and then county-level agents deliver goods to township stores. The advantage of this channel is that it can penetrate the market as far as possible and enter the market as quickly as possible through the original resources of dealers. However, due to over-grading, the profit of products will be deprived by dealers step by step, the price of products is not competitive in the terminal market, the number of dealers is too large, and the management cost increases. Over-grading of dealers often leads to information asymmetry or information difference between enterprises and terminals, and enterprises cannot respond quickly to changes in the terminal market, which leads to the disconnection between product positioning and market demand.

The classification of channel strategies is very broad, such as how to choose the appropriate channel model according to product positioning, how to deeply develop their own channels, and how to expand their own dealer resources, such as providing quality services and providing more profit space.