Key Factors in the Distribution Strategy

Distribution strategy is a major concern for any company that depends on a product for its profits. That product must somehow get from the source of production, such as the factory, to the place where the customer can buy it. The process by which this happens is called distribution and the analytical plan behind distribution is the strategy of distribution.

Distribution Network

A distribution network is established by answering the questions of who, what, when, where, and how in terms of getting products to their end point. Business operators must discern who is responsible for sending and receiving the product and who will transport it. They must also decide what products are transported to which outlets and whether there are different distribution strategies for different product lines. Someone must schedule when items will be sent from the production site, where they will be sent, and what work the marketing department will do to prepare for different outlets. And finally, the distribution coordinators will arrange the best way for the network to operate.

Local Access

In terms of a strategy, local access refers to a traditional brick-and-mortar location to ship produced items to. This means factories send items to stores where people go to shop for them to take them home, and it is still the most common way to distribute things to consumers. In this piece of distribution strategy, inventory is maintained at the site of the store. They are also able to pay with cash. Local access also includes orders that are placed through catalogs or online shopping sites, but must be picked up by customers. It is any situation in which customers go to a retail outlet and leave with an item they have purchased.

Remote Access

Remote access is the opposite of local access. Remote access includes catalog shopping or online ordering, which is in effect any arrangement in which customers order from their homes, pay by credit or debit card, and have the items delivered to them. A strategy for distribution must take into account that though local access is more common, increasing numbers of people find remote access to products to be much more convenient. It allows them access to the products that must be distributed without requiring that they leave their homes or make extra trips out. A remote access based strategy bypasses the expenses associated with local access distribution.

The Future of Distribution Strategy

More and more companies are finding that neither local access nor remote access distribution strategies will be sufficient to guarantee profitability in the future. Instead, the newest model incorporates both distribution strategies. The most successful retailers find that they can offer their inventory through both online and in-store means, satisfying customers of different needs and shopping styles.

These types of strategies are among the most important aspects of any business model. Without a clear idea of how it will get its product from creation to sale, no company can be truly successful. The best companies will offer their customers a place to go to buy their products as well as offering to deliver the products right to their doors. In the end, a both/and approach to this type of strategy is proving to be the most profitable.