Defining The Distribution Channels For Your Business Startup
For some products, the route to getting it into customers' hands is self-evident. For specialized, service-only ventures, you or your employees will personally deliver to the client, either on-site or at your place of business. Examples of these types of businesses are cleaning services, auto detailing, personal coaching, consulting, personal training, and training. Restaurants and other food service ventures also fall into this category.
Selling retail products, on the other hand, allows multiple options for distribution -- online sales, brick-and-mortar storefront, direct sales through sales reps, festivals or shows, etc. Consider the distribution routes used by your closest competitors. Are they using the most effective channels? Is there any way to modify or improve on the standard methods that will still be appropriate for your product? Will you start with one channel, such as brick-and-mortar and then move into other channels, such as online?
Your target customers also play an important role in the distribution channels you select. If you are selling directly to the end user, you probably have more options than if you are targeting distributors to market your product. Think about it from your target market's perspective. What is the easiest way for them to access your product? Under what circumstances are they most likely to be looking for what you offer? If your product is new to the market, consider where your target market currently purchases similar products. If it is easier for your customers to buy from you than your competitors, they will come.
Your own work style and personality are also relevant in considering distribution channels for your product. If the idea of spending your days chatting up strangers is distressing to you, then a brick and mortar storefront is probably not the best option. If spending countless hours in front of your computer sounds agonizing, avoid any wholly web-based options. Be honest about your preferences -- one of the greatest advantages of starting your own business is the freedom to choose how you get work done. Don't sabotage yourself by choosing a business that requires you to be out of your comfort zone for every sale.
No matter what your business idea is, there is usually a way to adapt your idea to a distribution channel that works for you and for your target customer. Take a chef that loves to prepare fine dining food but doesn't want the large crowds of a restaurant. This chef could base their business on a catering model or a personal chef model.
Many modern startups have a broad range of choices about how to distribution their products. Consider all three factors -- your product, your customers, and yourself -- before deciding the best routes for your business. If possible, consider developing multiple distribution channels within your startup, even if you only start with one initially. The more ways your product can get to your customers, the bigger your potential market.
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About the Author-K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System includes step-by-step business startup procedures, small business software & more, to help entrepreneurs start a business based on their idea. Visit LaunchX.com for a free Business Readiness Assessment.
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