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Product distribution methods like direct distribution are an essential part of a successful business. You could have the best products and a marketing drive which cost thousands, but it wouldn’t get
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Product Distribution Strategy
September 6, 2019
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Direct Distribution: Advantages, Examples and More

Product distribution methods like direct distribution are an essential part of a successful business. You could have the best products and a marketing drive which cost thousands, but it wouldn’t get you anywhere if you didn’t first think about your distribution process. This is, after all, the method through which you get products out into the world. Without it, all your other efforts will quickly become null and void. To ensure ease in this vital process, many business owners now opt to entrust outside companies with this critical task.

In reality, though, entrusting something so essential to an outside source might not be best for your company. Outsourced services can be long-winded at the best of times. That’s why endless business owners are starting to realize the benefits of direct distribution. This is the process of distributing products straight to consumers, and we’re going to consider why it could be worth your while.

What is Direct Distribution?What is Direct Distribution

As we touched upon above, direct distribution is the process of distributing products directly to your consumers. This is as opposed to indirect distribution, where outside sources take care of this process for you. We’ll get into the notable advantages of direct distribution later, but it can have significant business benefits for companies of all sizes. As well as simplifying processes and creating better company-consumer relationships, this could lead to economic business moving forward.

Your methods of direct distribution themselves can take on different forms depending on your business model and needs. In literal terms, the action of handing a product to a consumer in a retail store is direct distribution in its purest form. Equally, taking control over product transportation with your own business fleet counts, as do online sales.

For some businesses, the benefits of direct distribution are such that it’s their only model, while others opt for a mixture of both indirect and direct distribution solutions. The option which suits mostly depends on your enterprise and budget. Whatever you choose, though, implementing some semblance of direct distribution can have a significant impact on business processes. That can prove especially vital in an age where many consumers favor local and personable businesses above all. But, you needn’t take our word that direct distribution is the way forward. We’re going to break things down even further to help you decide.

Direct Distribution Examples

Understanding the basic concept of direct distribution isn’t enough to implement it into your business strategy. As mentioned, distribution like this takes various forms, and some are sure to suit your needs better than others. If you’re to stand any chance at developing a successful distribution process, then, you must delve a little deeper into your options. We’re going to help you do just that by breaking down a few examples of the most common direct distribution channels.

To understand which direct distributions could serve you, it’s vital you consider things like business goals and budget. Direct distribution can range from the affordable and easy to achieve in even small business, to methods guaranteed to set you back a great deal. Taking time over your decision here is essential for ensuring you don’t bite off more direct distribution than you can manage.

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Common Direct Distribution Channels Include:

  • Physical sales conducted in a retail store
  • Online sales which allow you to distribute products directly across the world and are quickly becoming one of the most popular direct channels
  • Telemarketing sales which allow you to reach and distribute to consumers
  • An in-house courier who allows you to post items to long-distance customers without worrying about an intermediary
  • Chain retail stores or office spaces are another common option, allowing companies to directly distribute products in a variety of locations

Advantages of Direct DistributionAdvantages of Direct Distribution

We’ve already touched upon a few advantages found with direct distribution, but you may still be on the fence about whether this method could benefit your company. That’s why we’re going to consider some of the more actionable and verifiable benefits of implementing this distribution process as opposed to an indirect distribution strategy. The most notable advantage for small business owners especially is, of course, the cost-saving possibilities of direct distribution. When you take the right channels such as online sales, it’s possible to start distributing products for comparatively minimal upfront cost, making it much easier to get started.

Cost-saving is also possible once a company begins to grow. Indirect distribution through outsourced couriers can, after all, be a financial strain. Once a company can afford in-house couriers, they stand to save a great deal with every distribution. 

Cost-based benefits aside, direct distribution can also have a significant positive impact on business to consumer relations. While large impersonal companies have come top of the race for the last twenty years or so as e-commerce comes to the fore, consumers are now shifting back to more personable businesses. 

Independent businesses who work to build loyal and lasting customer relationships are certainly seeing more success than those who attempt to take on the retail giants. By keeping your distribution efforts direct, you too can begin enjoying a niche market which is ready and waiting for your products.

When you deal directly with your customers, after all, you ensure that they have personal reasons to come to you above your competitors. This instantly sets you apart, as well as ensuring that your marketing budget and more brings repeat custom which, again, can save you money.

Selling products directly from your very own physical retail store could help you to achieve this loyalty to your brand. Even personalized packing and distribution from your online store can make a great deal of difference. You’ll be able to provide a more business-aligned service this way, after all, as well as guaranteeing delivery times and prompt arrival. These are small touches which could really set you apart from competitors still making use of indirect distribution processes. All while saving you pennies and making your business easier to manage. 

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Should All Businesses Use Direct Distribution?

We weren’t lying when we said that there is no one-size-fits-all for direct distribution. As such, there’s really no easy answer as to whether all businesses should use this method. Every company could enjoy the benefits discussed above, but it’s also worth noting that there are downsides to take into account. Direct distribution can sometimes cost more upfront, for example, as well as increasing internal workloads. That said, even small business can benefit from some direct distribution

Simply consider the following key factors first:

  1. Cost is a vital direct distribution consideration. You need to know both the expense and potential profits before making any decisions here.
  2. Direct distribution can also limit business reach, so make sure beforehand that your business won’t suffer from taking that hit.
  3. Direct distribution means more work in-house without question. Make sure, then, that your team is capable of meeting increased demands. Otherwise, you’ll annoy them and your customers.
  4. If you’re aiming for loyal local customers, direct distribution could serve you best. If you want a wider audience, indirect distribution would work better.
  5. Accounting is another consideration. In some cases, direct distribution can complicate taxes. That’s no problem with an accountant, but it could be confusing if you tackle this yourself.

With these points in mind, you can consider how much or how little direct distribution would work for your company. Even if you start small for the time being, the benefits you enjoy should soon see you accessing even more direct capabilities. Should all business use direct distribution? Yes. Can all manage it right away? Perhaps not.

Implementing a Direct Distribution StrategyImplementing a Direct Distribution Strategy

In reality, implementing a direct distribution strategy involves the same processes as any other distribution. Only, instead of thinking about wholesalers and retailers, your focus should be on your interactions with your clients one-on-one. As with any other distribution method, though, you need to consider things like your business goals and your potential revenue. It’s also vital that you take time to review your audience and their needs to make sure you’re developing distribution they can appreciate. Then, you need to start thinking about how you can implement this information to find success here.

Let’s consider your audience, for example, seeing as they’re at the center of this. Rather than relying on a customer base developed by another retail store, direct distribution means you first need to build a customer base who trust you. The best way to do this is, obviously, through social media channels such as Twitter and Instagram. Creating close and trusting relationships with customers here creates direct communications that you can use in your new distribution strategy. Think, too, about an easy-to-use website design, complete with a live chat feature and easy payment methods like Paypal. These things aren’t challenging to arrange, and yet they can take your direct distributions far by making buying from you easier than ever. It’s this ease and personal service which will ensure direct distribution works for you.

It may also pay to implement direct distribution in stages. As mentioned, cost and workload can be problematic here, so jumping straight in with a fully direct distribution process could topple a small business. Instead, perhaps integrate with existing indirect distributions. A website, for example, could work well with an outsourced courier to begin with. Equally, you may want to pair online sales with stock held in another company’s retail store to start. 

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Promoting Direct Distribution to Consumers

The customer connections you can develop are, by far, the best part of the direct distribution process. As such, knowing how to promote your direct distribution efforts to consumers is a vital part of this process. This is what will make you stand out as a personable company, and is where you stand to see real results. We’ve already touched briefly on social media as your best option here. This is a fantastic way to build consumer relationships and create those direct links. Whether you post about non-business content or even upload pictures of your packing process, this proves to consumers that there are no intermediaries when they come to you for business. This is a fantastic way to build that unswerving loyalty, especially when you’re operating online. With a computer between you, after all, customers have no real way of understanding your ethics or processes.

While it may seem outlandish in modern business, physical sales in a retail store or business fair of some kind can also work wonders. Social media can only take you so far, after all, and a screen will always hinder direct communications. As such, there’s nothing better for promoting direct distribution than handing products to clients face-to-face. There’s no denying, of course, that physical stores have seen various struggles in recent years, but things are changing for the better in this area. By promoting a large store opening in your local area, then, you can guarantee you start reaping the rewards of your direct distributions fast. Even when you’re attending events, printing banners with your company information and really talking to customers could set you apart.

Using Direct Distribution With Other Distribution ChannelsUsing Direct Distribution With Other Distribution Channels

As we’ve touched on briefly in this article, distribution needn’t be a one or the other situation. In reality, many businesses find success easier to come by when implementing a mixture of both indirect and direct distribution processes. In fact, a combination of the two is often the only way to introduce direct distribution in a small business setting. Remember, after all that, despite potential cost savings, direct methods can be expensive to begin unless you mix techniques.

This dual business model can be seen working in all manner of different applications, and top ones include:

  • Many companies enjoy the multiple benefits of direct online sales, while still keeping costs and workloads to a minimum with outsourced shipping services
  • A retail store is a prime direct distribution spot. Many companies pair this with wholesale collaborations in other stores
  • Some business owners opt for physical store sales and an outsourced accounting service, allowing direct distribution without complication
  • It’s not unusual for wholesalers and retailers to work together with online sales and wholesale packaging for speed and convenience

These aren’t by any means the only distribution collaborations, either. In fact, when you look closely at any business, the chances are that you’ll find a mixture of both processes behind them, at least to begin with. While many would admit that direct distribution is the goal, it’s something to work towards.

In some cases, you may even come to find that a complete direct strategy won’t serve your customers. If you accept multiple online orders which you have to pack yourself, for instance, you’re guaranteed to let at least some consumers down. By outsourcing instead, you ensure that you’re always able to meet with demand no matter how small your business itself. This can be a fantastic and invaluable way to grow your enterprise while still handling direct sales yourself. It also ensures you don’t leave yourself burning out by taking on too much at any one time. 

If the idea of implementing indirect processes right now bothers you, remember that these are often temporary measures. A small business, for instance, could soon begin to grow with the extra income of outsourced packaging. This, in turn, could lead them towards a growing team and thus get them closer to embarking on entirely direct processes. Once you’re fulfilling enough orders, after all, it’ll be possible to invest in your very own in-house packing team, all without leaving yourself even slightly out of pocket or stretching your current employees.

It’s worth noting, too, that some indirect distribution methods are worth keeping alongside your direct efforts. While dealing directly with clients is preferable in most cases, there are some instances when it won’t pay to cut yourself off from indirect opportunities. The chance to sell B2B stock to retailers, for example, is well worth doing even if you have your own retail store. This way, you can reach a larger audience who may then seek you and your more direct methods out themselves. Equally, entrusting outsourced couriers to take stock overseas is always worth doing for increased reach. 

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Have Questions About Direct Distribution?

We hope this article has helped you understand everything about direct distribution but, if you still have questions, there are other steps you can take. For one, looking into your business data and analytics can help you to see both what your customers want and how you can provide it. Equally, looking to competitors can be as useful here as it ever is for staying on top. By considering whether your rivals use distribution methods like those offered by R+L Global Logistics, you’ll have much better ideas about what works.

R+L Global Logistics has the consulting and logistics services you need to launch a direct distribution business and more. Rely on R+L Global Logistics’ experience in the entire supply chain process and take advantage of our insight on product distribution strategy.

Ready to take the next step? Contact us today to learn more about direct distribution and wholesale business plans

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