What is a Business Distribution Plan?
How any company markets and distributes its products or services will depend to a large extent on the nature of the business, its location and whether its products are physical, digital or a mixture of both.
In any event, it is crucial that the company has some type of business distribution plan. This will help the company to maximise its revenue streams and minimise costs. Whatever type of distribution plan is envisaged, there are a number of common elements that will most likely need to be taken into consideration.
Direct Sales
This is where a company or business sells directly to the public, using either a physical location or a website or both. This type of selling and distributing products can often involve agents of the company who will sell the product in return for a commission. Online sales of this type are normally done throughout what are known as affiliate schemes, which works on a similar principle.
Direct sales will involve the company marketing and distributing the product, possibly using warehouse facilities to store the product, direct liaison with the customer and customer service involvement after sales, including possibly a complaints procedure.
Indirect Sales
Indirect sales tend to refer to a company using intermediaries such as agents and distributors (a different type of agent to those mentioned above), exporters and a variety of trading companies. This type of sale is commonly used for overseas exports, and those export agents are likely to organise shipping and any necessary documentation that may be needed. Physical products may also need to be stored in warehouse facilities, possibly in one or more countries.
Business Warehousing
Business warehousing is a crucially important part of any company's business distribution plan. The company needs to have products physically ready to be sold or shipped based on orders that come in, otherwise the delay in production may be too great to sustain the order. At the same time, the company does not want too have to much of its capital tied up in products that are sitting in a warehouse and not being distributed to customers.
A business distribution plan should aim to balance both of these to their maximum capacity, and a large part of the effectiveness of such a plan will be to what extent the distribution is managed in an efficient and timely manner.
Most businesses will probably need to have access to some type of warehouse, either their own or one shared with other companies, and as such need to be aware of the various legal and operational rules and guidelines that they need to operate under.
Selling online
The internet has transformed many aspects of business, and any business development plan needs to take into account online sales. Many businesses will have their own website and sell products directly through that. Other businesses may have arrangements with major retailers, such as Amazon, who will fulfil and distribute their orders for them as part of a commercial arrangement.
Franchising
Franchising can also be a big part of any business development plan, as it allows the company much greater flexibility by way of enabling entrepreneurs to set up their own business, but using the title and product of the enabling company. The franchisee would be responsible for distribution of the product by way of sales to customers, and the company would be responsible for making sure the franchisee is supplied with regular products and promotional material to whatever extent is needed.
If franchising is a major part of any business development model, then it is crucial that the company has an efficient distribution system, as the franchisee is totally dependent on them for the product and for promotional material.