Japan's most preferred methods of distribution are through wholesalers and retailers.

This is because Japan has small stores that are not suitable for storage due to the limited space.

When a producer is done with finished goods, the company sells it to wholesalers for several reasons. Wholesalers purchase in bulk, hence reducing the number of people that would order products directly from producers. Through the wholesalers, the companies tend to reduce the number of people they serve, especially those who purchase smaller quantities. That saves them time and gives producers space to concentrate on production.

The wholesalers cannot manage to serve the people alone, hence the massive number of retailers in Japan. Retailers then deal directly with consumers to also help reduce congestion in wholesale stores. Retailers buy products from producers in lower amounts and smaller quantities.

This channel also reduces the number of intermediaries in a distribution channel hence reducing the product's final cost upon reaching the consumer. This is why their distribution channel has been considered effective in maintaining low costs of products.

An example of such a distribution would be the production of bread. Bread is produced at a factory, sold to an individual (wholesaler) in bulk, then sold to a retailer who sells it directly to the consumer.