In the past, selling was as simple as making your own products and deciding whereabouts in the shop window they’d look best. Then more and more decisions were added: whether to sell them at outdoor fairs, in franchises, in department stores, abroad, on online store distribution channels…
Choosing the distribution channels for products and services is a delicate and strategic step that has to take into account several main points:
- The type of product
- The price of the product
- Brand advertising
- Product positioning
Having said that, it’s no longer as simple as arranging your own shop window, and you need to look into where your customers and potential allies are.
Simple steps for building distribution channels
The best way to define your distribution strategy is to answer a series of questions about your products and business:
- What are your customers’ needs?
- Does your customer need a training or learning phase for your product/service?
- Is it a stand-alone product or service, or does it need supplementary ones?
- Is it for direct consumption, or will it need customization or installation?
- Is it for direct purchase, in person, or does it need to be shipped to their home?
- How is the shopping experience now and in what way can it be improved?
- What channels do the competition use and on which do they receive the most complaints?
- What new products or services can meet customer demand?
- What is the fastest positioning to satisfy customers?
- What costs and resources will a new distribution channel require?
- Is your product information ready to be distributed to your intermediaries?
This list will be very useful to you for evaluate where your business is at and to assess what type of distribution policy your catalog need; especially if you are thinking of opening an online store or expanding your ecommerce channels.
What is a distribution channel?
A distribution channel is not where you put products on sale, exactly, such as a website, a display counter at Corte Inglés or a page on Amazon. Rather, a distribution channel is the chain of steps necessary for a product or service to reach its final consumer.
This chain may require either few or many steps and intermediaries, may be offline and online, and include distributors, wholesalers, retailers and/or agents. Depending on the number of participants, it’s known as a direct or indirect distribution channel.
It’s not a matter of whether one is better or worse than the other: it just depends on the company’s goals and the type of audience and product.
A distribution channel strategy evaluates ways to improve the positioning of products to boost demand around them. Your main goal is to find the right customers and locations of demand, in order to speed up the process of connection between products and customers and make it profitable.
