The process of distribution of goods is one of the main factors that can affect the product in supply chain and final costs. The process is limited is small towns with low rate of trade and small geographic location.

IFIF Public Relations- being aware of consumer needs and delivering goods and services to them, should be fast with the lowest possible price. But with spreading the urbanization and Complex social relations, development of geographical territory, residence and economic activities place as the third pillar beside the producer and consumer and complete the procedures.

However, distribution systems and services in our country traditionally organized and lots lot expenses impose to our consumers. Due to these expenses, producers don’t get the main profit and the major profit goes to the dealers. On the other side, failures in distribution network raised the prices. Raising the prices lowered people’s purchasing power and formed unofficial distribution networks.

With a precise look at the distribution system of Iran, we understand that one of the main features of distribution system is the weak position of the chain stores and the lack of powerful management and good supervision. The most important problem of distribution system in Iran is the high costs of expenses, abundance of retails, the lack of sufficient information about the statistics of distribution network, undeveloped structures of Technical and institutions, imbalanced interactions between different guilds and the variety of associations and unions in Iran.

These problems caused challenges in distribution system in Iran and the main challenge is the unofficial distribution networks. This means in distribution network in Iran’s distribution companies only deliver some special products of large enterprises or companies under the government regulations like food staples and pharmaceuticals products. So, it can be said that distribution companies couldn’t find their real place in distribution system. On the other side, the weak electronic infrastructures is another problem that cause not enough supervision, extortion on consumer rights and finally tax evasion and the lack of transparency in unions and associations. Based on these problems the final pieces of the products rises.

30 percent increase in costs of Shopping

Mohammadreza Mortazavi, the Member of Iran Chamber of Commerce said: “one of the problems of manufacturers is the imposed price on the total product. This is the price that people in our society are paying. This problem has a long history in distribution system in Iran especially on the products that regular people in the society consume them. The price that a producer sells the product and the price that consumers buy the same product from the stores are too different and the rate of this distance is up to 30 percent. It shows that sometimes consumers are paying more than they should. Meanwhile in the section of food and health the prices of all of the products are exact and people pay the exact prices that has been fixed for the consumers.”

“It should be mentioned that usually the prices are written on the commodities but the written price is usually 20 percent higher than the cost of production. Production system won’t profit from these prices and sell the mentioned prices in much lower price. But the main profits goes to the distribution system and dealers and this problem hurts the whole production system of the country. You can notice these changes when you are shopping from the local stores in cities.” He mentioned.

“Comparing the systems of local stores and huge shopping malls shows that renting the retail store in Tehran is very expensive; so the shopkeeper should increase the profit from number of limited buyers and they implement this profit with raising the prices. But there is no such rules is big malls and shopping centers. Huge malls like Shahrvand, Hyper star and so on do not have monthly rent and don’t impose the rules on people. With this situation a big amount of money is spending on an invisible system and make further problems./s