Distribution has long time been a very important part of economic life, and distribution in simple terms is transfer of goods from point of manufacture to point of consumption at minimum cost and affordable services to end consumers. Distribution of goods in cities is organized depending on the city, and adapts the city regulations in the various segments in the distribution of goods. This work includes defining the term of distribution, its elements with tasks and objectives, defining the term of city logistics through the description of the participants in the city's logistics and it shows the system of distribution of goods in the city Varazdin, where it is covered the pedestrian zone of the city Varazdin, on concrete example of distribution company Hermo d.o.o. It will also provide analysis of the research results of the surveyed participants of city logistics of Varazdin, with advantages and disadvantages and possible solution to improve.