In a simple economy, a direct, manufacturer-to-consumer supply chain is a poor choice.

• A. True
• B. Sometimes
• C. Cannot be determined
• D. False

Answer: (B)

Channel design hinges on how a product reaches customers and the trade-offs between control, reach, and cost. A direct link from the manufacturer to the consumer eliminates middlemen, which can boost margins and enable close customer relationships, but it also carries all the logistics, inventory, and after-sales responsibilities. In a simple economy, those logistical and coverage demands can be costly or impractical if customers are dispersed, if there’s limited infrastructure, or if buyers expect local service and quick delivery. In such cases, a direct channel can be a poor fit. Yet in other scenarios—such as when the product is simple or digital, demand is manageable, and the producer can efficiently handle fulfillment and service—a direct-to-consumer approach can work well. Because the right choice depends on market conditions and capabilities, it’s sometimes the best option and sometimes not.