Entrepreneurship and Small Business (ESB) V2 Certification Practice Exam

Which of the following is an example of a direct distribution channel?

1. Retail store sales

2. E-commerce sales

3. Wholesale distribution

4. Brokerage services

The correct answer is: E-commerce sales

In the context of distribution channels, a direct distribution channel involves selling products directly to the consumer without intermediaries. E-commerce sales are a prime example of this because they allow businesses to sell their goods directly to customers through their own online platforms. This eliminates the need for middlemen like wholesalers or brokers and creates a straightforward transaction between the producer and the consumer. Retail store sales also allow for direct interaction with customers, but they often involve a physical storefront that could represent an intermediary in some contexts (for example, if they're not the original manufacturer). Wholesale distribution, on the other hand, represents a method where goods are sold in bulk to retailers or other distributors before reaching the end customers, inherently complicating the directness of the relationship. Similarly, brokerage services involve facilitating transactions between buyers and sellers rather than embodying a direct user-manufacturer interaction.