How to organize your distribution network

The entrepreneur has a choice of several channels to sell their products. These choices do not all have the same implications in terms of cost and logistics. 

There are a wide variety of ways to reach your customers. It is a question of choosing the method that enables you to target your customer more accurately and to provide them with what they need at the right time and in the right quantities. To do this, the entrepreneur needs to know:

  • Where their target audience makes their purchases;
  • When they make their purchases;
  • How many times a week, month or year they need the product being offered;
  • What their requirements are in terms of speed of delivery and after-sales service.

This helps choose the most suitable distribution channel, such as:

  • A store
  • The internet
  • A mail-order catalog
  • The telephone
  • The street
  • etc.

These various options do not present the same profile in terms of cost (e.g. selling on the internet costs less than buying or renting a physical space) and logistics (e.g. companies trading online or by phone need the infrastructure necessary to make deliveries). The purchasing experience will not be the same either (e.g. on the internet, the consumer cannot touch the goods, but can buy them when they want without queuing at the till). 

Creative alternatives

It is worth thinking outside the box and coming up with alternative and original sale channels which make you stand out from the competition. Why not offer a home hairdressing service for seniors? Or sell your vegetables directly at the farmer’s market rather than delivering them to the supermarket? 

Easy to find

Whatever the channel chosen, customers must be able to access it easily. Physical locations (such as stores or canvassing on the street) must be clearly indicated and easy to find, with a clear sign, a shop window that matches what is to be found inside the store or a logo on the street vendor’s clothing.

Companies are also advised to make sure that they come up in the right place on social networks and geolocation sites like Yelp (directory of local businesses), Zagat (food and tourist guide) or Google My Business (update information about your company on Google search, Google Maps and Google+). For virtual locations, the internet is really key. You absolutely must make sure that your company (and especially your product) is correctly referenced on the leading search engines (Google, Bing and Yahoo!). 

Commercial partnership

Sometimes, a company is too small or too new to have its own distribution channel. It should then join forces with a commercial partner. But it must first ask the following questions:

  • Does my product suit my commercial partner’s offering and target market?
  • Does my commercial partner have sufficient know-how to handle marketing of my product?
  • Does their reputation correspond to my company's image?
  • What sales is a partner able to guarantee me?
  • Will I need to pay them? And if so, what will the impact of this partnership be on my margin?

Source: Small Business Marketing Kit For Dummies, Barbara Findlay Schenck, John Wiley & Sons Inc., 2012.


Last modification 16.02.2020

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