Distribution channels help businesses to take their products from manufacturing units to their customers. It includes wholesalers, retailers, consultants, sales teams, online media, Internet, etc. You can choose one or more distribution channels based on the products or services you are providing.
Distribution channel is a significant factor that affects the success of your business. Hence, you have to be really careful when selecting a distribution channel to sell your products and services. There are certain factors you should consider before choosing a channel for distribution. Some of them are listed below:
Products or Services
All distribution channels may not be suitable for every product. Hence you have to consider the characteristics of your products for selecting a channel that is suitable for your business. Perishable products should be delivered to the customers as soon as possible, therefore, it is better to select a shorter route for distributing them. If the goods are durable, then diversified and longer channels may be essential.
It is better to ensure a direct delivery for custom made products, and it is better to sell goods with high value directly without a mediator.
Another element that impacts the selection of a channel is your market. If you are aiming consumer market, then a retailer can be necessary for you, but if you plan to sell your products or services in the business market, then you can avoid retailing. If the market is large it might need many routes for distribution, whereas direct selling is better for a small market.
You might need the help of middlemen to distribute your products. In such cases, give priority for those who are able to provide marketing services for you. Those who offer better promotional services can also be given preference.
The present condition of your market should also be considered before choosing a distribution channel. During the time of recession or depression, selecting a cheaper and shorter channel will be ideal. But during prosperity, you will get to choose from a wide range of channels.
Closely examine the distribution channels used by your competitors to get an idea about which channel is apt for your business. Sometimes it is better to go for the route selected by your rival, whereas it is better to try something new in some other cases. For example, a company may decide to by-pass the retail store channel and can choose door-to-door sales instead.
Learn about your potential customers. Find details about their distribution, preferences, frequency of purchase, volume of purchase etc. This will help you to select a distribution channel accordingly.