Abstract
There is overcapacity in China’s iron and steel industry. The average profit level of the whole industry was only 2.42 % in 2011. Structure of sales channels and sales costs of iron and steel enterprises influence the profit level to a large extent. Through analysis of characteristics of sales channels and channel cost structure in iron and steel enterprises, this paper questioned the generally accepted view that increasing the proportion of direct sales could boost profits. Moreover, this paper further made a comparison between direct sales cost and distribution cost. For comparison, the actual settlement data in an iron and steel enterprise were used. And this paper concludes that setting up sales channels in accordance with product category is a reasonable way to boost corporate profits in the sales link.
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