Product ‘distribution’ and ‘distribution channels’ may be one of the more misunderstood aspects of business today.
At a basic level, distribution can be considered the physical distribution of your products to a point at which your customers can take possession of them.
On another level, distribution is a larger proposition, incorporating sales channels and inventory. In addition to Product, Price and Promotion, distribution, or Place, is one of the classic four Ps of marketing.
What’s the Problem with the Difference in the Definitions of Distribution?
None really. If distribution is defined in its simplest terms, then that is the role it plays in a company. The other processes that are part of the bigger picture of distribution, like sales, are handled separately.
But inefficiencies quickly pop-up when you choose suppliers based on the simple definition and do not simultaneously integrate the processes that are part of the larger definition.
If you go with a courier service to distribute your products, that’s all they can do for you. It is left to your internal distribution logistics to manage orders, track inventory, prepare shipments and support your products after delivery.
How Does That Affect the Distribution Company You Choose?
Many companies who offer distribution services do so using the simpler definition. They are often little more than a trucking and/or warehousing company. Choosing this sort of distribution company increases your risk of inefficiencies that can be a drag on your bottom line.
What Services Should You Look for in a Distribution Company?
The quick answer is: all of the services that would fulfill the larger definition of distribution including:
- Promotion Services – Step one in getting your product to your customer is to let them know about it. Look for everything from creative services to a mix of advertising channels and CRM.
- Transaction Services – Sales are at the crux of any business. Sales support, including for multi-channel sales, ecommerce and B2B sales, may be one of the most valuable distribution services you use.
- Order Fulfillment and Tracking – Take a long hard look at the share of your resources that these two processes consume. Then think about what would happen if you could redeploy some of those resources into other areas of your business, like sales.
- Customer Care & Support – Unless your product is absolutely unique and you have a monopoly on the market, often the only thing that differentiates you from your competition is the level of support you give your customers.
You should choose a full-service, ‘big picture’ distribution company even if your business isn’t ready to take advantage of all of their services. Why? Because you want your business to grow and, when it does, you don’t want to have to source and contract a new distribution company.