Discrepancy of Quantity - Explained
What is the Discrepancy of Quantity?
Written by J. Mance Gordon
Updated at April 17th, 2024
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What is the Discrepancy of Quantity?
Discrepancy of quantity is the difference between the amount of product the producer makes and the amount that consumers want to buy.
How do Distribution Channels Help Overcome the Discrepancy of Quantity?
As a manufacturer we may produce millions of units of a product each year. Do we want to sell one product to millions of different customers? If we do, we may use a direct channel of distribution.
More likely, however, we would rather sell to a handful of retailers who can then sell to lots of individual consumers. That's where indirect channels of distribution come in.
But what are those channels of distribution really doing for us to overcome the discrepancy of quantity?First, it is accumulating. Outlets that sell our product might accumulate more than one of our product so that people have choices. For a different example, let's say we hand craft some specialty items. Maybe we don't want to deal with each individual customer and design each product. We can only produce one at a time. The outlet having more than one is still going to increase value for the consumer as well as us as the marketer. So, that's where accumulating comes in.
On the flip side, in that original example where we make millions and millions of products, we want to ship large quantities to a retailer or to the outlet whether it's our own outlet or a retailer. But, the consumer may not want to buy a large number of these items all at once. So, that's where bulk braking comes in. The outlet can break down a collection of items into individual options for the consumer.
So this is how we use our channels of distribution to overcome the discrepancy of quantity.
Related Topics
- What Does "Place" or "Placement" Mean?
- What is a Distribution Channel?
- What is Direct Distribution and Indirect Distribution
- What is Multi-Channel Distribution?
- What is a Channel System?
- Vertical Market
- Vertical Integration
- Ideal Market Exposure
- Intensive Distribution
- Selective Distribution
- Exclusive Distribution
- Discrepancy of Assortment
- Discrepancy of Quantity
- Channel Conflict
- Channel Stuffing