Expanding Distribution Channels | How-to Guides for running your business from Business.com

Every small business wants to sell more. Rather than simply thinking of ways to get more customers into your store, start thinking of ways to get your products or services out to more consumers. One of the best ways to gain more buyers and increase revenues is to sell through additional venues.

Expanding your distribution channels can be an effective tool to increase your business. Advantages to broader distribution channels include:

Heftier profits. Selling to more customers can raise revenues, cut per-unit costs and boost the bottom line.
Less risk. If you're selling through one channel, you've put all your eggs in one basket. Selling through multiple channels spreads risk.
Brand building. Making products available in more locations will raise consumer awareness of your offerings.

Action Steps
The best contacts and resources to help you get it done

Retail

Take advantage of the marketing and advertising power of existing retailers by placing your product with them. Depending on your product, the best option for this type of distribution channel may be specialty stores or department stores.

I recommend: Add your product to IndieRetailer.com's search engine, which is targeted to independent retailers. Generate interest in your product by taking it on the road. Search for trade shows in your industry or product category at TSNN.com. Outsource your product marketing to Phase Forward, a firm that specializes in launching products into the retail channel.

Wholesale

If you manufacture your own products, wholesalers may be an ideal choice to broaden your product base. The advantages of this distribution method are many: wholesalers buy in bulk, which increases your bottom line and reduces your storage needs, and they often have transportation networks in place which alleviates you of the cost and hassles of moving your products.

I recommend: Find a wholesaler in your industry at the National Association of Wholesaler-Distributors.

Sales reps

Consider hiring sales reps to widen your reach. By choosing reps who work independently, you can avoid the costs associated with opening additional offices in targeted areas.

I recommend: Hire independent sales reps by consulting the Manufacturers' Agents National Association (MANA), which has an online directory of its members.

Direct marketing

This can open up your products and services to a local, regional, national or even global audience. Sending out flyers, brochures or postcards are common tools used to open up direct mail channels. Or you can try to get your product placed in a big-name catalog.

I recommend: See a sample listing from Catalog Surf's searchable database of more than 11,000 catalogs, complete with buyer names, contact information and submission guidelines. Download templates for flyers and brochures at Microsoft.com.

Telemarketing

Opening up a telemarketing distribution channel can give you access to consumers nationwide without having the expense of opening retail locations. Telemarketing does require trained staff, however, which can raise costs.

I recommend: Contactual offers an on-demand call center program that minimizes the costs of setting up a telemarketing call center.

Internet

E-commerce is growing all the time. Look at selling through well-known marketplaces and up-and-coming comparison shopping sites.

I recommend: You probably already know about eBay, Amazon and Overstock. Also consider comparison shopping sites Froogle, Yahoo! Shopping, Shopzilla and Shopping.

International

International markets can offer higher profit margins and big growth. However, international markets can come with significant cultural barriers and bureaucratic hassles.

I recommend: Find a list of trade events where you can find international partners at Export.gov.

Tips & Tactics
Helpful advice for making the most of this Guide

There's no magical solution. The best channels for your company hinge on your market, your product and what your competitors are doing.
Start small. Learn one channel before you move to the next.
Automate. More channels mean more administrative details to juggle, so ease the load by automating processes as much as possible.
Consider cultural issues when going overseas. China and India are high-growth markets, but they also come with obstacles.
Big-box retailers have pros and cons. Chains like Wal-Mart, Target and Best Buy can be your ticket to the big time, but they're also notorious for playing hardball with vendors. They'll look for any chance to penalize you for mistakes such as an incomplete bill of lading or an inaccurate UPC code.

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