Distribution is the process of making a product or service available for use or consumption by consumers or businesses. It involves a range of activities, such as transportation, warehousing, and inventory management, that ensure that the product or service is available in the right quantity, at the right time, and in the right place. Distribution is an important part of the supply chain, as it connects the producers of goods and services with the consumers who need them. It can also play a role in pricing, as the cost of distribution is often included in the price of the product or service.
Products and services are distributed by channels such as direct selling, digital commerce, retail locations and partners. A distribution strategy may include several channels with a separate pricing strategy for each. It is also common for a distribution strategy to include methods of managing channel partners such as offering incentives to meet sales goals. Distribution typically has a geographical element and it’s common to use different channels from one region to the next. For example, partners may be used to access international markets. The following are examples of distribution.
An organic food brand opens its own chain of retail shops.
A toy manufacturers sells through a network of retail partners.
International Retail Partners
A French furniture company operates its own retail locations in France and sells through retail partners in 18 other countries.
A sugar refiner sells to a sugar wholesaler.
An information security consulting company sells its services directly to clients by networking at security and IT events.
An electronics company sells devices with television ads and a phone number.
Digital / Internet
A cloud services provider sells its services exclusively through its website using internet advertising.
A fashion brand develops a list of customers and sends them a full product catalog each season that drives telephone, internet and retail purchases.
A automotive company sells through a network of authorized independently owned dealerships.
Value Added Reseller
A solar panel manufacturer partners with construction companies who sell the panels as an option on new buildings.
A property developer sells through partnerships with a variety of sales agents.