Island Savings

Distribution

Whether you're planning to have a store-front, a website, or a travelling sales team, distribution options are an important consideration in connecting your product or service with your customer.

 

Distribution strategies

  • Determine the best method of mapping your products to your customer
  • Determine your customers’ channel preferences and then create a plan to deliver those channel options
  • Examine your competitors’ strategies and compare them to your own—can you gain any efficiencies or points of differentiation over your competition?
  • Do an in-depth SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis on your distribution channel as a whole and concentrate on improving weaknesses and eliminating threats.

EXPERT TIP

You want to avoid operational downtime because you've run out of production supplies. To ensure this doesn't happen, only establish relationships with dependable suppliers who have a track record of fulfilling the needs of their clients.

Distribution channels

Distribution channels are the paths that products and services take to get from your business to your customers. These paths can be long and convoluted, involving wholesalers, distributors and retailers, or they can be as simple as selling directly to the public from your home. What method of distribution is right for you? How does your competition distribute? What can you afford? If other people or companies need to be involved in the distribution process, it's essential that you communicate with them so you know exactly which part you play in the process.

Distribution resource planning (DRP)

DRP is a matter of looking at the needs you have compared to the resources available to you. This includes looking at the possible use of extra manpower, hired transportation, warehousing and other factors. Will you need to lease a truck and hire a full-time driver, or will you need to contract a much larger fleet? A good DRP will help you manage your inventory as well. You'll know exactly how much product you're shipping, where it's going, and when. The point is, whatever distribution method you choose, it must be reliable and safe for your product and your business, and it must be a method you can afford.

Avoid the pitfalls

  • Be willing to create different distribution channels for different products
  • Utilize multiple channels, especially including direct or semi-direct sales, and don't be overly concerned with distributor loyalty or inter-channel cannibalization
  • Revisit your distribution channel strategy regularly so that it doesn't become outdated, no longer meeting the needs of your customer.

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