A distribution channel refers to the series of businesses, sellers, and other intermediaries that a product has to go through before it reaches the final customers. The type of your business and the products you sell determines the entities that will be part of your distribution channel. The selection of the distribution channel is crucial in determining the success of your business because the way your products will be handled and the speed with which they will be delivered are all influenced by this selection.
Factors To Consider Before Selecting A Distribution Channel
Choose a distribution channel based on these factors:
Type Of Product
If your product is unstable or perishable you will have to ensure its quicker arrival that too in controlled conditions and for that, you have to use a direct distribution method.
Knowing your customers and their shopping habits is important to find out the right way to get products to them.
Depending on your particular needs and demands, middlemen can accelerate your product distribution and improve its efficiency. The decision to choose middlemen depends on the market, your budget, and the business relationships you keep.
How To Select A Distribution Channel?
Here are some important steps in selecting a distribution channel:
Study Your Competitors
Check out the methods used by your competitors and find out the specific reason why they chose it. If you discover a distribution channel which has been overlooked by your competitors then, using it might offer you some benefits.
Weigh The Costs And Benefits
After your company has chosen a distribution channel and has created support-systems for the same, reversing the decision is difficult. Before deploying resources for a distribution channel, weigh the costs and benefits clearly so that you will not have to regret making the decision later.
Rank The Choices Available To You
After having a list of options in hand, rank them based on the revenue they will generate and the costs associated with each. Choose a distribution channel that ensures all operations are within your budget, all the while helping you to reach maximum customers.
Prepare A Growth Plan
When your business expands, you may have to add more channels to connect to more customers. Employ the necessary strategies to ensure your entity’s survival in a competitive business environment together with its growth.
Do not go for a distribution channel merely because it is regarded as the industry standard. Instead, make the best decision after carefully analyzing all the options available to you.