How does distribution add value (or utility) to a product or service? For example, the impact that wholesalers and retailers have on that value.

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Goods and services are, of course, of no good to consumers until the consumers can actually have access to them.  Distribution (or its more sophisticated counterpart, supply chain management) can add value to goods and services by making them more easily and conveniently available to consumers.

Even if a producer has a product or service that consumers would really want, it is of no use unless it can get to them quickly and conveniently.  For this reason, distribution is of paramount importance.  If, for example, you invent a very useful new tool, you need to have a distribution network.  You want to get that tool in stores that are convenient for people.  You want to get it into Walmart, for example, and not just into a few really specialized hardware stores.  In other words, you need good retailers in your distribution chain.  If you have good retailers, you also need to get them your products in a timely fashion.  This means that you need good wholesalers and good transportation systems to get your products to the retailers.

Civil War general Nathan Bedford Forrest is quoted as having said that the secret to success in war is to “get there first with the most.”  He was talking about soldiers, but the same applies, in a sense, to products.  You need to have a good distribution chain so that your products can get to the right places first (or at least not too slowly) and in the right amounts.  If you can do so, it adds value to your product.

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