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Automobile manufacturers such as Ford and General Motors often use indirect distribution, such that dealers act as retailers.

What is Indirect Distribution ?

An indirect distribution channel involves intermediaries that perform a company's distribution functions. Indirect distribution frees the manufacturer from certain startup costs and responsibilities that can cut into the time it needs to spend on running the business.

Plus, with the right vendor relationships, an indirect distribution channel can be much simpler to manage than a direct distribution channel. It can give a company welcome support and distribution expertise that the company may not have.

A chain of intermediaries through which a product moves in order to be made available for purchase by a consumer. An indirect channel of distribution typically involves a product passing through additional steps as it moves from the manufacturing business via distributors to wholesalers and then retail stores.

However, indirect distribution can also add new layers of cost and bureaucracy which can increase costs to the consumer, slow down delivery, and take control out of the manufacturer's hands.

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