Distribution channels for your products and services

Unless you are starting a retail business, where all of your sales will be through a storefront, you will have to select the most appropriate channel(s) of distribution for your business. Channels of distribution get your products and services to the end customer. If you are a manufacturer, your products may flow through a wholesaler, and then to a retailer, before getting to the end user customer.

To give you an idea about the variety of distribution channels, think of the ways you can buy a CD today. They include:

• Music clubs
• Retail stores
• Television home shopping channels
• Internet stores
• Mail order catalogs

All of the ways that you can purchase a CD represent different channels of distribution for the manufacturer of CDs.

You must use channels of distribution that let customers buy your products and services when and where they want to buy them. If your customers want to buy things over the Internet, or through retail stores, or with mail order catalogs, then you must give them that opportunity. If your store is only open from 10:00AM - 5:00PM on weekdays, then you are effectively closing down your channel of distribution for some percentage of your market that is at work during these hours.

If you don't provide all of the channels of distribution that your customers want, then they will find a competitor to satisfy their needs. Think about mail order catalogs, or the Internet, that are open 24 hours per day, seven days per week. These mediums give customers the opportunity to buy products and services all day and night, and fully satisfy the when requirement. However, not everyone wants to buy clothes, or books, or music through catalogs or over the Internet (they want to try them first). Therefore, these channels don't meet the where requirement. You must mix and match your channels to provide a where and when for a large percentage of your target market.