Expanding Distribution Channels

Business.com / Business Solutions / Last Modified: February 22, 2017

Every small business wants to sell more. Rather than simply thinking of ways to get more customers into your store, start thinking of ...

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:

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

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.

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.

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.

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.

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.

Internet

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

International

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