What are the cost of distribution?

The

distribution costs apply to the cost of moving the product from the place of production to the point of consumption. This may mean the cost of moving items from the warehouse to the individual, in the case of direct sales. This can also mean moving the item from the item from wholesaler to a retailer where the item is sold to the end user. Items are rarely produced and sold in the same place. Instead, the item is made in a factory or other place of mass production.

The item is then sent or transported from an area where either an end user is produced or a mediator who sells the product to end users. Methods of sending differ depending on the item and the business structure. For example, individual items can be delivered directly to consumers in the case of wholesale or distributor who deals with direct sale, or hundreds of items can be sent from a wholesalers or factory locations where the items are sold.

Distribution costs are usually built into the price of the item. For example, if a retailer orders objects from the warehouse, a retailer or wholesaler must pay the cost of moving these items to the place of a retailer. If a wholesaler pays the distribution costs, the wholesaler can charge the retailer more for the purchase of the item to pay for transport costs. If the retailer pays the cost of transporting, these costs are taken into account when the item is the price for another user or consumer.

The actual distribution costs generally only concern actual transport fees. In other words, the cost of distribution may be the cost of employing a truck driver to manage the end user items. Costs may also apply to the cost of sending an item by mail or other method.

In some cases, advertising and marketing costs are considered to be distributed,Because advertising is necessary to secure individuals who want to buy an item. In most cases, however, the cost of advertising is stated separately as marketing costs and is calculated separately. Distribution costs are then a separate line item in a statement of budget or profit/loss that monitors the amount of purchase or selling costs per item.