What is distribution expenditure?

also known as distribution costs, distribution costs are a type of trading costs related to the process of transporting any finished goods from the manufacturer's equipment to places where they will eventually be consumed. This type of expenditure can take several different forms depending on the strategies used to complete the sale and all intermediaries that can be used as part of the delivery process. In addition to goods, distribution costs are also incurred in providing services to the buyer.

One of the simplest examples of distribution costs can be seen when it is a direct sale. The direct sale process means interaction between the manufacturer as a seller and a consumer as a buyer. With this application, the buyer plans the order directly with the seller without any retailer or wholesale worker to function as part of the exchange. Once the seller accepts the order, the arrangements for the Dejátra are purchased directly to the buyer, usually using the column function, courierservice or freight lines. These costs may be absorbed by the seller or handed over to the buyer under the purchase agreement.

The range of distribution expenditure may include costs other than simply shipping fees. In the event that some special processing is required during transit, these additional costs can also be assessed. In situations involving accelerated transport, such as the supply of overnight, these costs are usually considered a normal process. Even in situations that require special packaging to ensure that the goods arrive undamaged to the buyer's site, these fees can be considered part of the distribution expenses.

Depending on the nature of the business operation, some or all distribution costs may be manufactured by the manufacturer. This is sometimes the case of direct sales in which the seller offers the consumer free of charge as part of the motivation for trading with the manufacturer.With this type of arrangement, the seller usually concluded a contract for the purchase of volume, which allows you to send items at a significantly reduced rate, which in turn helps reduce the cost of distribution. Other companies also negotiate special transport rates with different suppliers, but pass on reduced costs to their customers as transport fees and handling, which are assessed when the order is placed and accepted.