Every business needs sound distribution strategies to ensure that their products are getting into the right hands. With the advent of the Internet, mobile phones, and social media, there are more ways than ever to get in touch with your potential customers. We’ll go over some common types of distribution strategies as well as some you may not have heard of yet.
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Direct Sales Channels
Direct distribution strategies usually involve selling products directly to the consumer. In the past, this was done with mail order catalogs or phone orders. These days, we have a lot more options at our disposal. Here are a few channels that the most innovative companies are using to distribute their products and find new customers.
Social media has taken the world by storm and with it has come a whole new marketing landscape. People spend on average 2 hours per day on social media, so it seems like a logical place to get your products in front of some new eyeballs. Depending on your ideal audience, it may be worth looking into social media marketing for your goods and services.
Pretty much every business has an online presence now. Many companies choose to sell their products directly to consumers through their websites using eCommerce technology. This allows you to ship products directly to the consumer and often gives the customer a better price as well. However, it means that your organization still needs to handle inventory management, shipping, and other logistics.
While direct mail still exists as a form of advertising, more and more businesses are turning to email marketing to sell their products. Especially if you have an eCommerce website as listed above, you can reach your fans and customers directly to get them to buy from your online store.
Indirect Sales Channels
When you implement indirect distribution strategies, that means the products go through one or more middlemen before reaching the consumer. This could be a supplier, a retailer, a wholesaler, or another third party. There are pros and cons to this method, like anything, and you’ll need to assess whether it’s right for your business.
Pros: You get the inventory off your hands quickly and get money upfront (usually). Another entity takes care of the selling and logistics for you, which can be good if you have a large business that needs to scale shipping and inventory.
Cons: You don’t have as much control over the process and third party suppliers often mark up their goods significantly.
More and more companies are turning to online marketplaces like Amazon and eBay to sell their goods. These sites are great because customers already know and use them daily. Depending on how you set up your business, you may or may not be responsible for the logistics of getting the product to the customer. Evaluate the costs and potential return for these marketplaces before you start selling there.
Wholesalers are another step in the distribution chain between the manufacturer and the consumer. Selling to a wholesaler means that the products are taken off your hands for a flat rate and the wholesaler sells them to retailers.
This is the tried-and-true method of distributing your products from the manufacturer to a retailer, such as a restaurant or a store. Depending on your product and your goals, there are a couple of different methods of distribution.
Intensive distribution involves putting your product in a lot of different retailers. This is usually done with lower priced goods or “impulse purchases”. The strategy with intensive distribution is to get as many eyeballs on it as possible and sell by volume.
Selective distribution means that the product will be sold at certain partners or retailers, but is still limited in its availability. An example of this that Thom Holland uses is local fruit being sold at regional markets. Regional or premium products usually go for this or similar distribution strategies.
This kind of distribution is usually reserved for high-value brands (think Tesla or Lamborghini). High-end fashion also fits under this model. Exclusive distribution means that consumers must buy from “official” distributors.
Companies may have more than one line of products and each may have their own distribution strategies. To be a competitive business in today’s tech-fueled landscape, you’ll need to make full use of the distribution strategies out there, and maybe try some new ones too. Make sure to keep this list in mind when you’re looking to revamp your distribution strategies.