In his book 1960 "Basic Marketing", E.Jerome McCarthy first attributed the marketing elements of an enterprise to the combination of four basic strategies, namely the famous "4P" theory: product, price, channel and promotion.

Distribution channel refers to the organizational structure of internal and external agents and distributors (wholesale and retail), through which goods (products or services) can be sold.

Specifically, the functions of distribution channels mainly include:

First, research, that is, collecting information necessary for planning and communication;

Second, promotion, that is, designing and disseminating information about goods to encourage consumers to buy;

Third, contact, that is, to find and determine potential buyers for manufacturers and communicate with buyers;

Fourth, cooperation, that is, adjusting the products supplied according to the requirements of buyers, including grading, classification and packaging activities;

Fifth, negotiation, that is, to participate in the negotiation of trading conditions such as price on behalf of the buyer or seller, so as to facilitate the signing of the final agreement and realize the transfer of product ownership;

Sixth, logistics, that is, storing and transporting products;

Seventh, financing, that is, raising and dispersing funds to pay part or all of the expenses required for issuance;

Eighth, take risks, that is, take all risks related to channel work.

Functions of distribution channels:

First, classification. Including product classification, grading, assembly and packaging, so that the goods can meet the needs of customers.

Second, logistics. Including the transportation and storage of products, in order to reduce the pressure on production enterprises.

Third, financing and guarantee. That is, to ensure the acquisition and expenditure of funds for channel work and enterprise production.

Fourth, take risks. That is, bear all risks related to channel work and part of the risks of enterprise production.

Fifth, find customers and promote sales. That is to find as many customers as possible and carry out corresponding promotion activities to attract customers.

Sixth, investigate the market and give feedback. That is, taking advantage of being familiar with the market, we can feed back the market information to the production enterprises in time to make them produce products that meet the market demand.