Channels of distribution are the paths that goods and or services follow from the producers to the final users.
The persons involved in the distribution of goods from the producer to consumer are called middlemen or intermediaries.
There are different channels that different products follow. Some of the channels include the following:

1. Producer to agent to wholesaler to retailer to consumer.
2. Producer to co – operative society to marketing board to wholesaler to retailer to consumer.
3. Producer to marketing board to wholesaler to retailer to consumer.
4. Producer to wholesaler to retailer to consumer.
5. Producer to wholesaler to consumer
6. Producer to retailer to consumer
7. Producer to consumer

The following are some the roles performed by middlemen in the chain of distribution

1. Bulk accumulation (assembling). They similar goods from different producers in small quantities and then offering the large amount gathered to buyers who may want to buy in large volumes.
2. Reducing transactions. The interactions between the producers and the consumers will be reduced since the middlemen are the ones who will be communicating to the consumers.
3. Bulk breaking. They buy in large quantities and then sell in small quantities as desired by the consumers.
4. Risk taking. They assume all the risks related with the movement of goods from the producers to the consumers. Such risks include theft, damages, loss due to bad debts.
5. Finance provision. Middlemen provide finance to the producers by buying goods in large quantities and paying for them in time.
6. Provision of information. Middlemen gather market information from the consumers then pass to the producers who in turn produce goods in line with the tastes of consumers.
7. Marketing/product promotion. Middlemen are involved in marketing of goods hence stimulating the interest of consumers.
8. Provision of transport. Middlemen do transport goods from the producers up to the where the consumers can access them. Both the producers and consumers are hence relieved of transport costs.
9. Storage
10. Variety provision
11. Availing goods to consumers

Factors that influence the choice of a distribution channel include the following:

1. Product nature. Perishable products should be sold directly to the consumers because delays may result to losses since they go bad fast. In addition, bulky products need direct selling in order to reduce transportation and stock handling costs.
2. Nature of the market. Where the market is concentrated in one area, direct selling is appropriate. A longer channel of distribution is preferred where the market is widely spread.
3. Role of intermediary. The channel chosen should be able to perform the services related to the product being sold e.g. for technical goods, the middleman should be able to offer technical support to the customers.
4. Resources and size of the firm/producer. If the producer is small, then direct selling would be appropriate. Large firms with sufficient financial resources can opt for long channels of distribution.
5. Channels used by competitors. If a firm wants its products to compete with those of the competitors, then is it prudent to use similar channels. A firm that wants to avoid competition should use a different channel of distribution.
6. Government policy. The channel chosen should be able to meet government regulations such as all middlemen distributing pharmaceutical products must be recognized by the relevant government bodies (Pharmacy and Poisons Board).
7. Marketing risks. In the event the firm wants to avoid risks related to distribution, it will opt for middlemen.
8. Questions

The term ‘market’ is usually used to mean the place where buyers and sellers meet to transact business. In Business studies, however, the term ‘market’ is used to refer to the interaction of buyers and sellers where there is an exchange of goods and services for a consideration.
NOTE: The contact between sellers and buyers may be physical or otherwise hence a market is not necessarily a place, but any situation in which buying and selling takes place. A market exists whenever opportunities for exchange of goods and services are available, made known and used regularly.

​It is a particular market in which specific goods and services are sold and with particular features that distinguish it from the other markets. The features are mainly in terms of the number of sellers and buyers and whether the goods sold are homogeneous or heterogeneous. Product market is also referred to as market structure. Markets may be classified according to the number of firms in the industry or the type of products sold in them.

The number of firms operating in a particular market will determine the degree of competition that will exist in a given industry. In some markets there are many sellers meaning that the degree of competition is very high, where as in other markets there is no competition because only one firm exists.
When markets are classified according to the degree of competition, there are four main types, these are;

1. Perfect competition
2. Pure monopoly (monopoly)
3. Monopolistic competition
4. Oligopoly