Factory direct

Factory direct

Factory direct is a term used to explain when a manufacturer sells directly to the end-user of a product. Most products bought and sold by consumers are purchased through intermediaries and in many cases can include two tiers made up of distributors and resellers.

Each selling tier adds cost to the product. While many manufactures have no ability to service and support end-users and thus use distribution channels, increasingly the Internet and eCommerce capabilities have increased the number of manufacturers who sell factory direct.

There are two common factory direct channel strategies. The first sets the price artificially high so as not to aggressively compete with the manufacturer's various channel partners. Thus, this is a very profitable channel but frequently misleads the customer who assumes the best price for a product comes when they purchase directly from the manufacturer. The second offers a "wholesale" price typical of what a reseller or distributor might pay.

Popularized by Dell Computers, a factory direct channel is one where the price is typically lower than one would pay buying through a multi-tier distribution channel.


Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Direct Factory Outlets — Location Various, Australia Own …   Wikipedia

  • Direct imports — are products imported directly into a country and not through the manufacturer s authorized agent/distributor. Since there is no factory authorized middleman involved in the import of these products, the added costs are lower and the customer… …   Wikipedia

  • factory costs — factory expenses The expenditure incurred by the manufacturing section of an organization. Factory costs include direct materials, direct labour, direct expenses, and manufacturing overheads but not mark up or profit …   Accounting dictionary

  • factory costs — factory expenses The expenditure incurred by the manufacturing section of an organization. Factory costs include direct materials, direct labour, direct costs, and manufacturing overheads but not mark up or profit …   Big dictionary of business and management

  • factory — fac‧to‧ry [ˈfæktri] noun factories PLURALFORM [countable] MANUFACTURING a large building or group of buildings where goods are made, using large industrial machinery and usually employing many people: • The owner wouldn t comment on the factory… …   Financial and business terms

  • Direct TPMS — Direct TPMS, or direct tire pressure monitoring systems (direct sensor TPMS) refers to the use of a pressure sensor directly mounted on the wheels or tires of a vehicle.[1] The pressure inside the tire is measured using a pressure transducer with …   Wikipedia

  • Direct metal laser sintering — (DMLS) is an additive metal fabrication technology developed by EOS out of Munich, Germany, sometimes also referred to by the terms selective laser sintering (SLS) or selective laser melting (SLM). The process involves use of a 3D CAD model… …   Wikipedia

  • Factory overhead — Factory overhead, also called manufacturing overhead or factory burden, is the total cost involved in operating all production facilities of a manufacturing business. It generally applies to indirect labor and indirect cost, it also includes all… …   Wikipedia

  • Direct from Brooklyn — is a compilation of music videos by They Might Be Giants. It was released on VHS in 1999 and DVD in 2003. Contents 1 Track listing 1.1 DVD only 1.1.1 Audio tracks …   Wikipedia

  • Direct-Shift Gearbox — Transmission types Manual Sequential manual Non synchronous Preselector Automatic Manumatic Semi automatic Electrohydraulic Dual …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”