The effects of distribution fees on channel relationships within the USA

Abstract

The recent transfer of channel power and control to middlemen within the USA has resulted in efforts to intermediary overhead costs to manufacturers in the form of distribution fees. This article seeks to develop a conceptual framework which identifies the antecedents and consequences of distribution fees via a review of secondary source material. In addition, a related propositional inventory is developed to facilitate future primary research in this area. Integrative growth, market information, private label development and product proliferation are posited as antecedents of the shift in channel power and the subsequent practice of distribution fees. Channel conflict, reduced competitiveness, poorly conceived products, negative effects on consumers and legal violations are posited as consequences of these fees.

Keywords:

• Channel Power
• middlemen
• channel conflict allowances
• distribution fees