The concept of a physical distribution system in sales refers to the processes and channels used to move products from the manufacturer to the end consumer. It encompasses all the activities involved in getting the product from production facilities to the point of consumption or use. Here’s how the physical distribution system works in sales:

1. Order Processing: The process begins with the receipt of customer orders. Sales representatives or customer service teams handle order inquiries, take orders, and enter them into the system.
2. Inventory Management: Once orders are received, the physical distribution system involves managing inventory levels to ensure that products are available to fulfill customer orders. This includes inventory tracking, stock replenishment, and warehouse management.
3. Warehousing: Products are stored in warehouses or distribution centers before being shipped to customers. Warehousing involves storage, picking, packing, and shipping activities to fulfill orders efficiently.
4. Transportation: Transportation is a critical component of the physical distribution system. It involves selecting the most suitable mode of transportation (e.g., truck, rail, air, sea) to deliver products to customers in a timely and cost-effective manner.
5. Distribution Channels: Distribution channels refer to the routes or pathways through which products are delivered to customers. This can include direct sales to end consumers, sales through retail stores, wholesalers, distributors, or online channels.
6. Logistics Management: Logistics management involves coordinating and optimizing the movement of products through the physical distribution system. This includes route planning, carrier selection, shipment tracking, and managing logistics partners.
7. Order Fulfillment: Order fulfillment encompasses the entire process of receiving, processing, and delivering customer orders. This involves picking products from inventory, packing them securely, and shipping them to customers within the promised timeframe.
8. Customer Service: Customer service is an integral part of the physical distribution system. Sales representatives, customer service teams, and logistics personnel play a role in ensuring that customers receive accurate information, updates on order status, and assistance with any issues or inquiries.
9. Returns Management: Returns management involves handling product returns and exchanges from customers. This includes processing return requests, issuing refunds or replacements, and managing reverse logistics to return products to inventory or suppliers.
10. Performance Measurement: Throughout the physical distribution system, performance metrics are used to evaluate the efficiency and effectiveness of sales and distribution processes. Key performance indicators (KPIs) may include order fulfillment rates, delivery times, inventory turnover, and customer satisfaction scores.

By effectively managing the physical distribution system in sales, businesses can ensure that products are delivered to customers in a timely manner, meet quality standards, and contribute to overall customer satisfaction and loyalty. Effective coordination and optimization of sales and distribution processes are essential for achieving competitive advantage and driving business growth.