Distribution cost definition

What is Distribution Cost?

Distribution cost involves those expenses related to the transport of goods. Distribution costs may include the following:

  • The movement of goods to resellers and customers

  • Transport fees and tolls

  • Warehousing costs (including the rent charged to store goods in a warehouse)

  • Product handling costs (including the cost to move goods within a warehouse)

  • Costs to maintain a fleet of transport vehicles (including maintenance, repairs, and vehicle depreciation)

The distribution cost for a business can be substantial when the units shipped have a high cubic volume, goods are perishable, or when customers are located in distant areas.

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Distribution Channel