How to Write a Marketing Distribution Channel StrategyThe Major Functions of a Distribution ChannelDifferentiated Distribution StrategyDistribution Channels and Marketing AnalysisThe Advantages of Channel of Distribution to a Small BusinessWhat Is a Marketing Channel or Channel of Distribution? A distribution channel strategy enables you to sell to customers in geographical areas or market sectors that your direct sales team cannot reach. You can choose from a number of distribution channels, including wholesalers, retailers, distributors and the Internet. Each channel gives you different options for dealing with customers and prospects. However, to ensure that your distributors operate effectively on your behalf, your strategy must incorporate the right level of control and support.
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Reach
If your strategy is to grow your business regionally or nationally, highlight the geographical areas you want to reach through a distribution channel and identify a network of distributors or retailers that provide existing coverage of the territories. If you are planning to export products, focus on established distributors with detailed local market knowledge. Consider marketing your products on the Internet so that you can extend coverage to customers where there is no suitable physical distribution network.
Cost
Although a distribution strategy gives you a ready-made platform for expansion, it’s important to compare the cost of dealing through indirect distribution channels with the cost of setting up your own network or direct sales operation. Without a distribution network, you will have to commit resources to order processing, stockholding, delivery, invoicing and customer service. Compare that with the lower margins you will make by giving distributors a discount for providing a similar level of