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What Is a Final Consumer?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 24 November 2016
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    Conjecture Corporation
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A final consumer is the last point in the distribution channel, which is a term that is used to describe the various routes a product or service will follow before it gets to its ultimate consumer. Sometimes the distribution channel to the final consumer is very short, while at other times it may be a more complicated and drawn-out affair. The definition of a final consumer includes both human beings and other non-living entities like companies. A final consumer is differentiated from other types of intermediaries between the producer of the goods and that consumer by the fact the consumer is purchasing the good for his or her own consumption.

A short distribution route from the producer or the manufacturer of a product to the final consumer means that the process is very brief and direct. An example of such a short route can be seen in the case of a person who goes to a restaurant to eat. If the person orders filet mignon, then the restaurant is the producer, while the individual is the final consumer. On the other hand, if a grocery store orders some ready-made filet mignon from the restaurant to sell to its customers, then the grocery store is an intermediary between the producers and the final consumers.

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Sometimes the distribution route is much longer than the two scenarios described above. For instance, a farmer could sell truckloads of corn to a wholesaler who will sell the corn to a distributor. The distributor may supply the corn to other resellers, including retailers. All of these people are merely intermediaries between the farmer and the final consumers who will purchase the corn from the grocery stores and other points of final sale. Also, the longer the distribution channel the more likely it is that the final price of the product will be higher due to the fact that the intermediaries along the distribution channel add their own profit to the item as it is passed along the distribution route.

An example of this can be shown using the case of the farmer who is the producer of the corn. Assuming the farmer goes to a farmer’s market to sell his corn instead of selling it to a wholesaler, the farmer will greatly reduce the path of the distribution to the final consumer. Such a move will also make the price of the corm much cheaper for the final consumer since the middle men have been effectively cut out of the picture.

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