Distribution channels are arguably one of the fastest ways to get a jump start on growing your business, making identifying appropriate distribution channels an absolutely necessity while crafting your growth plan. One of the most common misconceptions is that distribution channels are typically used for physical products, however, this is not always the case. Start-ups can benefit greatly by identifying the right distribution channels when offering a service. This is because more often than not, these channels act as mediums that connect you to your customers.
Importance of distribution channels
As the founder of a start-up, you’re probably wondering whether increasing your spend to promote your product is the right move for you. While you may be well-versed in newer niches like digital marketing and online shopping, it is essential to not forsake older sales models like distribution channels in favour of these.
Do keep in mind that most brands today are now veering towards Tier-2 and Tier-3 segments, where internet penetration may have facilitated the adoption of online shopping, but not to the extent to which the urban population relies on it. In order to grab the market, you’ve got to ensure your product is easily available to those who are looking for it. Thus, taking into account ‘old-school’ business practices like using distribution channels is vital for your success.
One of the main reasons why I could grow our merchant base at PayLo so rapidly post demonetization was because we created a strong distribution channel through a network of channel partners (or resellers)
Types of distribution channels
Direct and indirect distribution channels
Broadly speaking, distribution channels can be broken down into two forms – direct and indirect channels. Direct channels allow customers to purchase products or services straight from the manufacturer,. On the other hand, indirect channels include one or more than one intermediary, which means that customers may come across your product while interacting with your vendors. In order to truly facilitate rapid growth, it makes sense to have a mix of both.
For instance, if you offer sneakers for women, don’t just rely on your own brick-and-mortar store (your direct channel) to sell your goods. Cultivate relationships with store owners that house multiple brands and ask them to get your product to the customer. A great example of a modern indirect channel in this space would be an e-commerce marketplace like Amazon and Flipkart that routinely promote your products.
In case of digital content, aggregator platforms like YouTube are extremely popular. In fact, internet browsers and mobile handset integrations have become increasingly important distribution channels for content in the current day and age. At Zee group, these have become an important source of traffic for us.
Best channels of distribution for your business
You may have understood by now that not all distribution channels are made equal. Certain channels can do wonders for your brand while others only let you down, which is why it is essential to choose your distribution channel wisely. While conducting your research, answer a few basic questions.
Does your target audience want to interact with salespeople? Does your audience shop online (and if so, where do they shop the most)? How quickly does your product need to reach the customer before it is no longer usable? These can help you weed out channels and select the most relevant ones.
Identifying the right channels can help you get your product to your customer quickly and effectively and can become the key to your success.