Help in Price Mechanism

In many cases, the channels also help implement the price mechanism. They conduct price negotiations with buyers on behalf of the principals and assist in arriving at the right price- the price that is acceptable to the maker as well as the user. This is vital for the consummation of the marketing process. The manufacturer would find it difficult to complete this step without the help of the channels.

Look after a Part of Physical Distribution and Financing

Channels also look after a part of the physical distribution functions like transportation, handling, warehousing, sub- distribution, and order processing and inventory management. Channels also share the financial burden of the manufacturer by financing the goods flowing through the marketing pipeline. Often, they pay cash and lift the products; in the process, the manufacturer gets his money long before the products reach the ultimate users. In some cases, the channels provide substantive deposits to the principals. In several cases, the channels also extend credit to the subordinate levels in the channel and to the consumers. This also relieves the principals’ financial strain to an extent. More than everything else, the channels place the products close to potential consumers and thereby enhance the chance of its sale.