Scaling Your Distribution Strategically and Effectively
Technology has made the retail marketplace highly competitive and globalized, which means it can be exceedingly difficult to keep up with changes in industries and stay afloat. The upside to this, however, is that it has also made growth more accessible and faster; online storefronts have democratized distribution channels and made it easier for all types and sizes of businesses to get their product in front of the right consumers.
In the age of social media platforms, smartphones and apps, and giant online retailers like Amazon, startups and small businesses have just as much potential to scale their distribution and increase profit margins as many high-capital businesses.
Here are some of the essential pieces of information and most helpful tips for you to plan the expansion of your distribution channels:
Are you ready to scale your distribution?
This might seem obvious, but you can’t assume that your brand and product are ready for large-scale distribution. You must ask yourself if your product is ready to be scaled. You always run the risk of stunting growth and losing money if your product is not yet the ideal customer solution. If your product is still in the non-scalable validation phase, don’t rush. A considered, high-quality product is worth more in the long run than short-term aggressive distribution scaling.
It’s critical to the success of your brand and product that you scale your distribution when you are ready and prepared to do so. Perform plenty of analysis, reviews, and surveys before launching into growth strategies.
Breaking down different kinds of distribution channels:
There are many different methods of distribution, but all of them are various combinations of four central players: producers, wholesalers, retailers, and end consumers. Some products go through long sales distribution channels that involve all four phases. This is common among wineries and adult beverage brands. Other methods include a producer selling product to retailers, who then sell to end-consumers.
Two of the leading sales distribution channels for online or digitally based brands? The direct-to-consumer model and selling online via digital retailers and marketplaces.
The direct-to-consumer model entails creating an independent storefront and selling directly to your target customer. If this is already the core of your product distribution, it is possible to scale and grow your operation through this smaller-scaled platform. To do this, set up email automation sequences that will provide customer service during off-hours and segment groups of customers to send exclusive coupons and deals. Make sure you have consistent, updated content across all of your websites and social media platforms. Promoting yourself across a wide variety of marketing channels will help brand awareness.
Selling your product on a digital marketplace like Amazon or Etsy can be an incredibly effective way to put your product in front of many target consumers all at once. These platforms have millions of active and consistent consumers. Your brand is much more likely to be discovered when it is accessible on such a popular platform. Expanding onto a digital platform requires you to create pricing strategies and learn specialized marketing language tailored to the system and algorithms of each marketplace.
Your plan to scale your distribution will likely involve multiple sales channels. If that is the case, minimize pricing conflicts by mapping out the price for each retailer, and include a fair profit in those calculations. If not planned out ahead of time, you risk losing profit margins throughout the expansion of your distribution.
The end goal should always be: make your product as easy to buy as possible for your target customer.
Look at scaling your distribution as a marketing technique.
Scaling your distribution functions as another facet of your marketing strategy. Distribution channels and your rate of growth must be looked at in the context of your broader product development and brand strategy.
And, like the rest of your brand strategy and marketing plan, your distribution scaling must be customer-centric. Think about who your end-consumer is and work backward to determine how you scale your distribution effectively. What are their preferences? Where and how do they like to shop? What companies and platforms do they already have relationships with? Your method of distribution should be an asset to the customer to whom you’re selling.
Think of your distribution channels as both sales-based as well as strategic partnerships. You are selling yourself and your product to third-party platforms that have relationships and connections with your target audiences. This relationship will put your product in the marketplace in front of the right consumer at little expense to you. In this sense, it’s also a strategic partnership between your brand and the platform through which you are scaling your distribution. Does this platform or retailer has the right connections for your target demographic?
The way you scale your distribution should align with the rest of your brand essence and identity.
Seek specialized knowledge – it will pay off.
In today’s complex marketplace, when there are dozens of online sales platforms and hundreds of wholesale/retailer options, it will be in your company’s best interest to seek out experts who have exceptional knowledge of your options. You know your brand and product better than anyone in the world; now find someone who can advise you on how and where to make it shine.
Advisors and partnerships can play a pivotal role hacking new distribution channel platforms. Amazon, for example, can be incredibly daunting to new sellers and will waste your company’s time time, resources, and investment if you aren’t prepared to navigate the sales challenges specific to that platform.
They can also help you track conversations and data that will provide invaluable insights as to how successfully your new sales distribution channels are performing.
Something else to think about? Localization of products. If you are trying to sell your product globally, think about specific distribution channels that will help your International markets understand it in the context of their local community and culture. What translates in your home base may not translate when introducing your product overseas; distribution channels can be an asset to your brand as you make those strategic expansions.
Timing, brand awareness, and customer-centric scaling solutions are at the core of any successful scaled distribution plan. However, you choose to scale your distribution, ensure that your strategy is considered and tailored to your end-customers.