(Solved Homework): How does the Internet alter the power relationships among distribution channel players?…

How does the Internet alter the power relationships among distribution channel players?

Expert Answer

Growing e-commerce landscape has entirely changed the power relationships among distribution channel players.

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Consumer is now more aware of his/her purchase. He has the power of being informed about the product and competitors too. He can make comparisons of various sellers or various products. Buyers can have price benfits too. As it is possible to cut out intermediaries in this type of model, suppliers generally translate the saved margins to discounts for customers. Buyer has the power to choose from a wide variety. Time and Travel were restrictions for a buyer purchasing the product offline. Internet saves a lot of time and there is no need to travel.

Sellers have power too. They can reach out to more number of consumers. The suppliers who take the early lead make good business. Also, throught internet it is easier to maintain structured relationship with the buyers.Also, we can manage each buyer differently. Suppliers have the advantage of reaching to the buyers directly eliminating intermediaries in many cases. Some type of goods make it necessary to have an intermediary when sold offline. But with internet, this can be solved. For example, Selling mobile phones. Suppliers also have access to huge amount of data. They can analyse the buying patterns and according plan their future strategy.

Internet has made both suppliers and buyers powerful.

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