When it comes to market expansion, the best companies know how important it is to stay on top of their sales process. That’s tough to do if you’re not evaluating and optimizing each step of the process. Product distribution is only one step of that process, but it’s one that’s often overlooked.
Having an effective product distribution strategy is critical to driving sales and growth.
What Is Product Distribution?
By definition, product distribution refers to a company’s ability to make a product available for purchase by distributing it to the markets. It involves transportation, packaging and delivery. Product distribution is a key pillar in your supply chain.
A distributor is defined as someone who purchases products, stores them, and then sells them through a distribution channel. They are in between manufacturers and retailers or consumers, working on behalf of a particular company as opposed to representing the company themselves.
In short, the right distributor can help your business get exposure in the markets while helping you do so quickly and efficiently.
There’s no two ways to split it, getting your products distributed is vital for all businesses. Product distribution is a key pillar for both startups and established companies. Many startup businesses have created amazing products, only to fail later because they couldn’t secure distribution.
If your business model is designed to rely on distribution partners to get your product out to the markets, you need to take the time to get familiar with distribution channels. This is especially true for startup businesses because distribution can be your ticket to fast growth.
Many startup companies believe in their products but a great product is not enough to be successful. What builds a strong business is a great product and a great team and often your success is built on your distribution network.
You’ve likely been thinking about this…
- What would happen if we can get our product on QVC?
- How fast could we grow if we could get our product on Walmart shelves?
Sound familiar? Look, those moves could be huge for your business, but it takes a lot to get into that position.
Things don’t always go as planned and if you’re looking to get product distribution, there’s some key points you need to learn and understand before you start making moves. In this article, we’re going to break down everything for you.
To better understand the distribution roles, there’s 4 distributor profiles you need to become familiar with.
- Distributor – A distributor is a wholesaler but with more input and responsibility. While distributors fulfill retail orders, they can also help sell products on behalf of producers.
- Wholesalers – Wholesalers fulfill orders of retailers by reselling goods in large quantities from manufacturers. To get a lower price, wholesalers often buy in bulk from distributors and manufacturers.
- Retailers – Retailers are outlets where consumers can purchase goods. A retailer can be a local store or a larger company such as Best Buy.
- Agents/Brokers – Agents handle the logistics of the sale. Agents will handle contracts, marketing and specialized shipments. They can also help with customer service management.
Choosing The Right Distribution Types
Now, most products can be delivered through multichannels, which is a good move for your business. The last thing you want to do is rely on one single channel for your distribution. You may end up getting a distribution channel but it doesn’t mean you’re going to be successful. It’s one thing to get a partner, it’s another to perform.
What you need to do is weigh out all your options.
- VAR (Valued-Added Reseller)
- Sales Agent
- Internet (Direct)
- Catalog (Direct)
- Internal Sales Team
Before you start reaching out to potential partners, you need to think long and hard about what you need in your partner. You want to find a distributor that has experience in your specific niche and industry.
Who’s The Best Distribution Partner For Our Needs?
You need to start thinking who would make a great distribution partner in your specific category. Don’t get caught up with the brand itself, but rather, dive deep into the proper category.
Take a close look at the descriptions of each partner, you’ll use this in the next step to begin building your partner list.
Here’s some questions you need to ask yourself.
- What types of skills will help this company sell my products?
- Does this company have experience selling products like mine?
- What types of customers can they help me find to buy my products?
- What special needs, skills, resources will they need to sell my products?
Start Creating Your Target List Per Category
Once you’ve went through the first 2 steps, you can now begin building your list out per company, per category.
Here, you want to create your list of potential partners you’d want to work with based on the research you’ve outlined above. It’s always best to have your team on hand for this rather than doing it yourself.
Create Your Partner Pitch
You have to remember, partnering with a distributor is a two-way relationship. You want a partner that’s going to help you get out to the markets and they want a partner they can rely on. It’s a win-win relationship with everything goes right, that’s why it’s important to choose the right distribution partners.
- What are the key benefits working with you?
- How will you support your distribution partners?
- What type of marketing support will you be helping with?
Choosing a distributor should be a carefully thought out decision. You want to make sure you choose the right distribution partner and it’s an equal relationship. A healthy relationship can ensure the success of both parties, but you must make sure they’re a good fit for your business.