Distribution Strategies for Small Businesses
What exactly is the product distribution? Distribution, in broad terms, is the manner by which you make your goods or services accessible to prospective consumers. In most simple terms, you directly sell your goods to the consumer. There are no warehouses, stores, middlemen, or no other such paraphernalia involved. Product distribution used to be a very labor-intensive process, but technology has largely made it unnecessary.
If you wish to successfully promote and distribute goods, you’ll need to think about product distribution strategies. One great way to ensure your promotion reaches a wider audience is to buy Facebook likes or similar boosters. Most people think of mass production as being the most efficient and perhaps the most effective of all distribution strategies, since it tends to reach a large number of consumers at a low fixed cost. However, while this strategy can work in theory, in practice it can be extremely labor-intensive and expensive, especially if you have to employ highly-trained employees to oversee the process.
Mass production and selective distribution involve relatively high costs, but they can be highly effective. If you’re looking to market an item through the retail sector, for example, one of the best product distribution strategies you can implement would be to set up a store in your own neighbourhood. You don’t even have to rent a building or pay for an overhead; you can simply purchase a small block of shop space and make your own shop. The downside to this approach is that you face competition from local shops and restaurants, as well as from internet sales, as some people are less willing to pay for local products.
If you’re looking to sell things exclusively online, there are several good product distribution strategies you can use. If you want to sell items via eBay, for example, one of the best strategies you can use involves purchasing items in bulk. This doesn’t always entail buying thousands of DVDs at once; instead, you can buy a certain quantity of a certain type of DVD, like “The Godfather” or” Gladiator”, and then resell these items individually. You can also take this a step further and open an eBay store from your home – this is often referred to as “exclusive distribution”. The downside to this type of strategy is that you will effectively be competing with other eBay sellers for the same DVD market, which can be difficult for someone who isn’t well-established or experienced in the field.
The Internet is home to many different product distribution strategies that can be successfully implemented by a small business. The most popular strategy that small businesses use involves setting up a website and selling items through online auctions. This strategy usually involves buying cheap items at wholesale prices and reselling them on eBay, though some auction websites, such as those run by the Government, do not allow direct sales of goods from consumers to retailers. The advantage to this type of product distribution strategy is that you do not have to face any additional costs, such as store rental, inventory, or shipping costs. Also, eBay provides buyers and sellers the opportunity to communicate with one another through their website, which is invaluable to small businesses that want to expand their customer base.
Another popular strategy used by small businesses is the so-called vertical distribution model. This model involves the distribution of products either vertically (downwards) or horizontally (which is upwards). For example, it would be illegal to sell books in a bookstore, but it is perfectly acceptable to sell magazines in the newsstand. This horizontal distribution model has many advantages, such as allowing small businesses to compete directly with large companies, without the need for middlemen and distributors. The disadvantages of this type of model are that it can be expensive to start and may not generate enough revenue to cover the expenses involved in setting up the distribution infrastructure.
The last of the distribution strategies we will discuss is the three tier system. The three tier system enables large companies to easily enter the market and provide products to retailers at very low prices. Three-tier systems usually involve manufacturers distributing their own products and channel partners selling them to retailers, but sometimes manufacturers and distributors combine their efforts and work as a team, producing larger discounts and better product quality. However, there are some disadvantages of this distribution system. Three-tier systems typically result in lower profit margins for small distributors and manufacturers, as well as lower sales volume.
We have discussed the three distribution strategies available to small businesses. We have also talked about the importance of the product distributor in a competitive market. Many of these distribution strategies can be implemented easily and effectively if a company has the right marketing plan. If consumers know what products are available and how they can be purchased, they are more likely to make a purchase. In turn, this increased sales leads to more profit for the manufacturer or retailer and this leads to more potential buyers.