Target Intermediary Distribution Practices: A Case Study

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There are several types of distribution strategies that can be utilized by suppliers. Physical distribution involves the steps that are taken to ship finished and completed goods from the manufacturers to the customers (Marshall, Solomon, Stuart, 2012). These steps include order processing, warehousing, materials handling, transportation and inventory control (Marshall, Solomon, Stuart, 2012). There is also a direct channel of distribution which allows the manufacturer of a product to distribute directly to the end customer (Marshall, Solomon, Stuart, 2012). Finally, are the channel intermediaries, or otherwise known as middlemen, which is utilized by wholesalers or retailers who assist in delivering the product to the end customer (Marshall, …show more content…
“Intermediaries play a variety of roles in making the services available to prospective user” (Donnelly, 1976). Many manufacturers rely on retailers to be the middlemen that stock and sell the end products to the customer. Target is considered the intermediary between the customer and the manufacturer. Retailers have become larger and as a result, it has become more economical for manufacturers to supply to retailers rather than wholesalers (Management Study, n.d.). Target and retailers that are similar to Target have the ability to take title to or they may purchase products from the manufacturers or other market intermediaries in order to stock their products in their stores and sell to their customers (Hammond, …show more content…
Acting as an intermediary retailer, Target is able to stock and sell Target exclusive brands that customers cannot purchase anywhere else. Threshold’s prices are very reasonable and the products provide functionality, beauty and are very economically priced for consumers. By stocking and selling items that are exclusive to Target, this gives the retailer the advantage when compared to its competitors and the retailer’s frequent loyal customers will continue to shop the store. Especially, since Threshold and other Target exclusive brands are always launching new items each season. Not only is Target able to stock brands that are exclusive to them but they are also able to stock and sell their own store brand of grocery products whose prices and quality greatly rival that of other big box stores. Intermediary retail stores such as Target benefit from acting as the middleman as well as the manufacturers who sell to Target benefit from selling to an intermediary. “This allows both parties to mitigate risk, as the retailer can sell a variety of goods without having to produce them all, and the producer can acquire sales channels across the globe without investing significantly in real estate” (Lumen Learning,
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