There are three channel levels in the context of distribution management viz. zero level, one level and two level. Levels of channels depend on the number of intermediaries within a distribution channel. The greater the number of intermediaries, the more will be the channel level.
Where products are offered directly by the manufacturer to the customers, it is zero level channel. Over here manufacturers ensure that they are themselves equipped to forward their products smoothly to the end user. Dell at one point of time used to have zero level channel of distribution.
They customized their computers as per the requirements of customers and distributed them. One level channel involves one intermediary such that one channel member in between the manufacturer and customer. Two level channels are found mostly in case of FMCGs where there are two intermediaries viz. – wholesaler and retailer.