Think about how you will get your product to market. By going through this section you will be able to have a clearer sense of which distribution method is right for you and your business. Some common methods of distribution include:
- Direct to consumer
- Retailer, who sells to consumer
- Wholesaler (distributer), who sells to retailer
- Agent, who sells on behalf of the producer
Your customer may not be the end-user of the products/services you provide. Keep this in mind when developing promotional plans, pricing strategies, image, and market position. Who are you selling to, not who is your product for?
When determining the proper distribution process for your business, take these factors into consideration:
- Nature of the product- Some products are only meant for direct sale to consumer.
- Size and location of the market- If your marketplace is too far away it might be best to distribute your products through a wholesaler.
- Availability of distribution methods- Access to some channels of distribution is limited, and a combination of methods may be required for you to generate your sales goals.
- Your competition- Could you use a better method, or an existing method in a better way?
- Your time, energy and goals
Distribution affects your sales and profits. Selling direct to consumer will yield a greater contribution margin; however, selling through a distributer may allow you to reach more customers.