Product distribution involves making your product available for buyers by spreading it through the market. This process entails packing, transportation, and delivery, and it is fundamental to your business’s sales. Now, let us find out the methods of distribution.
There are 3 methods outlining the way producers choose how they wish their products to be distributed in their market.
The ‘Intensive’ Method
As the name implies, this form of distribution involves getting your product to as many physical outlets as you can. The objective of it is to make a way into as much of your market as possible.
The ‘Selective’ Method
This is about distributing products to select stores in specific areas. This is usually based on one particular product and that good’s fit in an outlet. Doing this allows makers to choose a price point, which targets a specific consumer market, therefore giving a shopping experience that is more customized.
The ‘Exclusive’ Method
This involves distributing your goods to limited brick and mortar stores. This can include luxury brands limited to special collections, which are available only in specific stores or locations. This method of distribution helps maintain both the image of a brand and product exclusivity.
Know Your Channels of Product Distribution
A distribution channel is the flow of business, which takes place between a maker and an end user. It is the direction which a transaction follows. Product distributors act as intermediaries who deliver and house goods for manufacturers to trade to retailers. These can be rather simple or more and more complex channels.
There are indirect and direct distribution channels. The former makes intermediaries a part of the sales flow. Conversely, in the latter channel, the manufacturer works directly with customers.
Levels of Distribution
Four levels break down the sales flow between producers and consumers.
Level Zero: This is the simplest one, involving a direct product sale from producers to customers without intermediaries.
Level One: This channel has an intermediary, acting as the middleman amid the manufacturer and customer. A retailer is a classic example of this.
Level Two: This one involves a couple of intermediaries between the maker and consumer. A wholesaler selling products to a retail outlet, who then trades to the customer, would be an example of this.Level Four: This is where a broker or agent comes in. These parties work for companies, and they deal mainly with wholesalers. From there, the wholesale parties sell to retail outlets, and so on.