What exactly is the product distribution? Distribution, in broad terms, is the way in which you make your goods or services easily available to potential buyers. In simple terms, you simply sell your goods directly to the consumer. There are no warehouses, stores, middlemen, or no such thing. Your distribution system is simply a vehicle through which you reach out to and sell your goods to your clients.
Now that we have defined product distribution strategies, we will now move into describing what each of them are and how they can be utilized by retailers. The first distribution strategy that we will discuss is the manufacturer’s direct sales. For example, people can buy YouTube likes directly from the manufacturing website to boost their marketing results. With manufacturer direct sales, a retailer obtains goods directly from the manufacturer. These are typically manufactured by the manufacturer at their factory and then distributed to retailers through a distributor or direct manufacturer.
Another product distribution strategy is retail chain management. This involves the engagement of a third party, such as a wholesaler, to assist a retailer in the distribution of products. This type of strategy can be quite effective for small businesses, especially those that do not have a lot of inventory to distribute. The manufacturer or wholesaler serves as the third party which makes purchases from the retailer, distributes the merchandise to the retailer, and then restores the items at a price that is slightly lower than that of the wholesale price.
Other product distribution strategies include both direct and nondirect distribution. Direct distribution involves selling goods directly to consumers; non-direct distribution refers to distributing goods indirectly through retailers and distributors. Examples of non-direct distribution strategies include membership warehouses and outlet stores. These strategies are also commonly referred to as cross-marketing.
Other distribution strategies include joint venture marketing and licensing opportunities. Typically, when a company or entity has the resources to do so, it will seek out another organization that has the ability to utilize those resources in order to develop new products. This process of developing new products with another company can take place through a number of means, including acquisitions, joint ventures, licensing, and collaboration.
There are a variety of distribution strategies available for any business, large or small. Many of these strategies are discussed below. One intensive distribution strategy is known as selective distribution. With selective distribution, the company only distributes a specific portion of its products to one segment of the market. For example, a company may choose to only distribute its line of golf products to golf stores.
Mass distribution strategies, on the other hand, are strategies which distribute a product in bulk to a large number of customers. The most popular mass distribution strategies include dropshipping and warehouse store chain strategy. Dropshipping is a strategy in which dropshipper stocks a product on behalf of a retailer and then ships that product to the customer from the drop shipper’s warehouse. Warehouse store chain strategy is a strategy in which a retailer maintains a chain of outlets all over the country, which allows the retailer to effectively sell a single item to many customers at a time. These strategies are considered most effective when companies have access to large amounts of capital.
Every successful small business owner should know about product distribution strategies, which allow them to determine which distribution method will work best for their company. Some of these strategies may be difficult for small businesses to implement in their own organizations, but some are very easy to implement. Many small businesses start out with one distribution strategy, expand to another, or change their strategy altogether. Regardless of what product distribution strategies you decide to implement for your small business, there are many ways that it can be effective.