Hi folks, today in this article I will talk about the distribution channel. Many times you have heard a lot about marketing distribution channel. But people don’t know exactly what distribution channel is and how marketers create it. Therefore to clear the concept of the distribution channel, you must stick to this article. I will start with the basics here.
What is distribution channel?
In very simple words, the distribution channel is the network used to get a product from the manufacturer or creator to the end-user. Here the buying and selling of goods and services are much simpler and more linear. Furthermore, the distribution channels are the network of organizations that include manufacturer, wholesaler, and retailer. These three organizations distribute goods and services to consumers.
Therefore, a distribution channel is the network of individuals and organizations that provide product and services from the producer to customer.
Let’s move further and learn how to create distribution channel.
Step-by-step process of creating distribution channel
#Step 1: Evaluate creating a new distribution channel
The very first step in creating the distribution channel is to evaluate the channel in which you want to access your market. You can use multiple channels like web, sales team, retail location or indirect channels like a wholesaler, distributor or consultant. Therefore, if you add a new channel, it would be a great way to launch new products to a large market, grow revenue quickly, speed cash flow and enhance your brand’s experience with your end-users.
Once you analyze business goals and existing channels, you will know new whether the new distribution channel will work for you or not.
#Step 2: Explain how your channel will look like
The second step in the creation of a distribution channel is explaining how your channel will look like. Tell the true needs of your customers and how you would expect your channel to work. Ask yourself these questions – what are your requirements to create and fulfill orders if you are selling directly? Does your channel partner need any kind of guidance, training or support?
If you answer these questions, it will help you determine the type of channel you want to create, channel structure and channel logistics.
#Step 3: Discover channel partners and build your own channel
The third step in creating the new channel is determining the specific element of the channel. First ask yourself the purpose of your channel; how it will benefit your customers, what your channel logistics are, how you will proceed orders, and how you will handle inventory. Therefore, if you answer these they will help you build the criteria for potential channel partners that would support your distribution goals. This will be the right time for you to approach your potential partners and build your plan for managing the relationship.
#Step 4: Create a pricing strategy of your channel
The most important step in the creation of a channel is the pricing strategy. You must examine the strategy to minimize pricing conflicts. You need to create a strategy that can include a fair profit for each type of partner. Therefore, if you compare your price with other partners in the industry and then create a channel it will surely reduce the potential for pricing conflict.
#Step 5: Get revenue through your channel
ROI is the main aim of every marketer. To get high revenue from your channel, it is important if you treat your partners as customers. If you do so, they will support your brand and promote your offerings. Furthermore, you can support your channel partners through marketing campaigns. With campaigns, you can generate more leads; provide training or sales tools and marketing funds to promote your brand offerings.
#Step 6: Manage your channel partners and enhance channel performance
The final step in making your distribution channel successful in the market is to manage your channel partners. Suppose, you create a distribution channel but you’re failed to manage it then what’s the point to creating it. The entire motive of the channel ends here. Therefore, you need to build a plan to identify and improve your channel performance. Moreover, try to measure your ROI, and identify solutions to resolve channel conflicts.
Guys, I hope you understood the concept of distribution channel and how you can create it. You can follow the above steps to create a successful channel for your business. Moreover, you need to manage your relations with your partners otherwise you will fail in your marketing channels. With this approach you will surely build a good distribution channel for your business.
For more informative articles subscribe our website, till then keep reading and keep sharing.