E business distribution systems and value strategies

types of distribution strategy

You sell a product through a geographical network of dealers who sell to end-users in their areas. The chemical industry, for example, may have no analog to a discount store or a rack jobber.

An e-commerce company, depending on their business model may see themselves as the manufacturer, a wholesaler, or a retailer. Then compare the price that the end-user will pay; if a customer can buy from one channel at a lower price than from another, your partners will rightfully have concerns.

distribution channel strategy

They act as an extension of the producer in the sense they represent them before the end customer. Care must be exercised when considering negative actions as these may fall foul of regulations and can contribute to a public backlash and a public relations disaster.

That sole channel could be a brick-and-mortar store or an e-commerce website.

E-commerce distribution strategy

However, while the long-term goal is the growth of sales, the near-term outcome may be the growth of a customer base or purchasing options. Jobber: A special type of wholesaler, typically one who operates on a small scale and sells only to retailers or institutions. E-commerce allows for 1-location storage, shipment tracking for the customer, assessing popularity of a product, stocking large amounts for high-demand periods and more. Type 2. Resellers are often with the mindset they are in the business of sales, not consultation. Give your customers the logic between using your product and finding a solution to their needs. Gathering and processing feedback for the manufacturer may improve the brand perception, the development process and customer loyalty. Train the partner. Robust CRM data can help predict potential production needs or the ideal location of products prior to the start of a new campaign. Maybe a line is not selling for reasons that have nothing to do with the manufacturer — pricing, shelf placement, location of the store etc.

A broker would have a portfolio of manufacturers they work with in a particular geographic area. Multi-channel managers continue to report that reducing the costs of order fulfillment and improving overall distribution efficiency are at the top of their to-do lists.

Internet and E-commerce has really popularized direct distribution, however, we find E-commerce is very specific and therefore we have allocated a special place for E-commerce at the bottom of this article.

E business distribution systems and value strategies

Step 5 requires them to compare these two sets of data with each other and also with the system of distribution already in place. Definition[ edit ] Distribution is fundamentally concerned with ensuring that products reach target customers in the most direct and cost efficient manner. Brokers will be very selective about the portfolio they assemble. A level one sometimes called one-tier channel has a single intermediary. It would have found that the amount of hand-holding required to make a personal computer plus a software sale is extremely high. El-Ansary of the textbook Marketing Channels Prentice-Hall, and has published scores of articles on marketing management and marketing channel relationships. In addition, online retailing or e-commerce is leading to disintermediation , the removal of intermediaries from a supply chain. If they were interested in advice how to take care of a baby kitten, they will be offered cat food. And so important opportunities for gaining a competitive advantage through distribution remain, and given the new technology, some companies may, as Federal Express has, achieve a breakthrough. Learn more about the customer — when and how they use their training shoes. It is these people, of course, who actually benefit from the products a company makes. Brokers are normally not responsible for the shipping itself. How will a local company compete with existing national retailers? Channel intermediaries create assortments, which means that they will source different products and allow the customer a larger choice. Do customers want immediate delivery, or are they more concerned about the assurance of delivery?

The size of the market and your price will probably dictate which scenario is best. E-commerce in general immediately makes products available for a large customer base and therefore less intermediaries are needed.

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