A distribution strategy defines the way in which your product reaches your customer. It includes all the distribution channels and processes, a bit like a map of the paths your product takes since it is manufactured or created right up to when it is received by a client.
This map – your distribution strategy – is absolutely vital to the success of your business. The more effective your distribution strategy is, the more satisfied and loyal your customers will be, the more cost-effective your activity will be, and the more you will be able to grow and reach out to new customers.
A well-designed distribution strategy can save you time and make product delivery more efficient. So how do you design this map, and what are the important aspects to consider? This article aims to outline the benefits of a distribution strategy and give you an idea of the different options available so that you can work out which one is right for your product.
A distribution strategy should define where and how your consumers purchase your products. The most efficient distribution strategies complement the existing internal resources within your company, to save money, and outsource any additional services that are needed.
It is important to create a distribution strategy that is easy and intuitive for customers, so they are likely to purchase from you again. Ensure that your product is accessible to your target audience, so that they discover you in the first place, and then purchase your products again in the future. The more effective your distribution strategy is, the larger your target audience of potential customers will be.
You can also tailor your distribution strategy to your growth objectives, so that the distribution channels give you the opportunity to reach new customers and build brand awareness.
Let’s take a closer look at the benefits of establishing a distribution strategy. As well as making your products accessible to your customers and making the most of internal and external resources, a well-defined distribution strategy can also:
- Reduce logistical costs
- Prevent problems in the supply chain
- Ensure that delivery deadlines are met
- Improve customer experience
- Promote your products to other markets and consumers
Distribution Strategies Types
So, now that we have convinced you that you need a well-designed distribution strategy, let’s have a quick look at the different types available, so that you can start thinking about which one best suits your company.
Direct distribution involves the manufacturer taking orders and sending its products directly to the consumer. As well as having access to more data about your consumers and target audience, it can also result in higher profit margins because there are fewer intermediaries.
Indirect distribution involves working with intermediaries to distribute your products. These can be retailers, wholesalers, franchisors or distributors, depending on your needs. Wholesalers purchase products in bulk in exchange for a reduced price, whereas retailers purchase products directly from the manufacturer to sell in their physical storefronts, or via websites or other channels.
A franchisor is someone who has purchased the rights to a product or service and the brand name from the manufacturer, who maintains a certain level of control, and a distributor helps transport products from manufacturers to retailers.
This distribution type involves placing your products in as many retail locations as possible, and only really applies to inexpensive products that customers purchase routinely.
This distribution strategy involves distributing your products to more than one retailer, but being very selective about which ones you work with.
Last but not least, an exclusive distribution strategy involves selling your product to one specific retailer, or only through your own website or physical storefronts.
Whichever distribution type you choose, the important thing is to define your strategy and make sure it is as efficient as possible, in order to give your product the best opportunity to cross paths with the customer who needs it. It really is as simple as it sounds. So, what are you waiting for?