| Summary: | The current distribution system of industrial products in Indonesia does not have a standard nation-wide pattern, although some distribution patterns do exist. Competition among distribution agents is getting keener and keener. This article deals with distribution cost of industrial commodities. Industrial firms in this country feel that competition to market their products involves high distribution costs. Winning the channel is thus a key success factor. Firms learned that they are "required" to give substantial margins to distributors, wholesalers, and retailers.
Manufacturers paid a relatively small portion of the retail price for warehousing, and transportation cost as well. The major problems faced by distributors are inadequate infrastructure and facilities, illegal facilitation cost, and the high price of vehicles. Some distribution channels are so highly concentrated that the corresponding producers enjoy oligopolis tic (even monopolistic) power. Such oligopolists have more control over producer price than that of consumer.
Key words: Indonesian industry
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