Having the right distribution strategies in place can give you a great advantage over your competitors. You could have the best products in the world, but if you cannot get them to your customers in a timely and cost-effective manner, you’re wasting money on marketing and you’re losing opportunities for growth.

When determining what distribution strategies best fit your company’s goals, you need to ask three key questions:

  • How will you get your product from the manufacturer to your customers?
  • How will you save time and control your costs with your implemented distribution strategy?
  • Which distribution strategy will allow you to build a competitive advantage?

Indirect vs Direct Distribution

Overall, there are two types of distribution: indirect and direct. With indirect distribution, your product will go through numerous channels before reaching your end customer. The product may leave the manufacturer, then go to a distributor, who sends it to a retailer, where the customer buys it. With direct distribution, you would send your product directly to your customer or otherwise reduce the number of channels it’s sent through. You might sell your product directly through an e-commerce portal, or directly distribute your product to retailers.

Intensive, Selective, and Exclusive Distribution

As with most strategic concerns, the devil is in the details. Indirect and direct distribution strategies are further impacted by the level of penetration, as determined by your marketing mix:

  • Intensive distribution is used when mass marketing a product to cover as much ground as possible.
  • Selective distribution is used when you want your brand to be available in only limited outlets.
  • Exclusive distribution limits distribution rights narrowly, for example to a single distributor within a specified region.This is generally the default for small businesses.

Your distribution strategies and needs can change over time, especially if you are growing a small business. With our world class supply chain management distribution services, American Western Distribution is ready to work with you to determine the logistics of your company’s individualized distribution strategy.