Compare direct and indirect channels; give examples for each in startup distribution.

• A. Direct channels sell directly to customers, such as an online store or company website.
• B. Direct channels rely on distributors and retailers to reach customers.
• C. Direct channels are only used by large corporations.
• D. Direct channels are the same as supply chain channels.

Answer: (A)

Direct distribution means selling straight to end customers without intermediaries, which gives the startup full control over the customer experience, pricing, and data. In practice, this shows up when a company uses its own online store or website, its own app, or a direct sales team to reach customers. For a startup, this path is common because it lets you build brand messaging, learn from direct feedback, and capture customer insights that can inform product development.

Indirect channels, on the other hand, involve intermediaries like distributors, retailers, or resellers who reach customers on the company’s behalf. This can broaden reach quickly and reduce the burden of fulfillment, but it typically means lower margins and less direct access to customer data.

So, a startup example of direct channels is selling through its own online store or company website. The idea is to own the relationship with customers rather than relying on third-party intermediaries. The other statements describe indirect channels, or misconceptions about who can use direct channels, or confuse direct channels with broader supply chain concepts.