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S U P P L Y C H A I N M A N A G E M E N T ,

Product Distribution Strategy: The Ultimate Guide [Infographic]

Melissa Sonntag

7 Min Read

When expanding into new markets, the best brands know that

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I N S I G H T S A N D

staying on top of their entire sales process is critical to sealing the

deal. But how can you stay on top of your sales process if you

aren’t engaged in it each step of the way? Product distribution is

one important step that often goes overlooked as brands opt for

the cheapest or easiest option rather than devising a legitimate

distribution strategy. In this post, we will tell you everything you

need to know about product distribution, from different

distribution strategies to who is who in the industry, so you can

refine your own distribution strategy to achieve peak

performance on the shelf.

1. What Is Distribution? 2. Distribution's Favorite Channels

3. The Three Types Of Distribution

4. Who's Who?

What Is Product Distribution?

Let’s get technical. Distribution entails making a product available

for purchase by dispersing it through the market. It involves

transportation, packaging, and delivery. Distribution is

fundamental to a company’s sales.

A distributor is defined as someone who purchases products,

stores them, and then sells them through a distribution channel.

They are in between manufacturers and retailers or consumers,

working on behalf of a particular company as opposed to

representing themselves. Usually, distributors partake in

collaborative relationships with clients and manufacturers.

S T U D I E S

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How to Use POS Data for Intelligent Retail

The right distributor enhances a company’s exposure in the

product market and can give an edge in terms of speed and

efficiency.

eBOOK

Download the Guide to Innovative Product Distribution! Download our product distribution eBook to take a

closer look at how a new class of distributors and

brokers are getting better data about their

performance on the shelf and building relationships

with their brand partners.

Download the eBook!

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Execution

[Free Guide]

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Brogie 1 Min Read

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M A N A G E M E N T

Product Distribution Strategy: The Ultimate Guide [Infographic]

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Sonntag 7 Min Read

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! " # $

Know Your Product Distribution Channels

A distribution channel refers to the flow of business that occurs

between a manufacturer and a consumer. It is the path that a

transaction follows. Distributors are the intermediaries that deliver

and house products for producers to sell to retailers. These

channels can be relatively simple or increasingly complex.

There are direct and indirect channels. In a direct channel, the

producer works directly with the consumer. An indirect channel,

on the other hand, incorporates intermediaries into the sales flow.

There are four levels that break down the flow between

manufacturers and consumers. When looking to expand into new

markets or switch up your distribution strategy, you need to know

the different levels of distribution.

Level Zero: A level zero distribution channel is the simplest. It

involves a direct sale from manufacturers to consumers with no

intermediary.

Level One: A level one channel has one intermediary as the

middleman between the producer and consumer. An example is a

retailer between manufacturer and consumer.

Level Two: When thinking about levels, associate the number to

the number of intermediaries. In this case, a level two channel

involves two intermediaries between producer and consumer. An

example here would be a wholesaler selling to a retailer who then

sells to the consumer.

Level Three: Here’s where an agent or broker comes in. Agents

work on behalf of companies and deal primarily with wholesalers.

From here, the wholesalers sell to retailers who then sell to

consumers.

The Three Types of Distribution

Distribution strategies depend on the type of product being sold.

the trick is knowing what type of distribution you will need to

achieve your growth goals. There are three methods of

distribution that outline how manufacturers choose how they want

their goods to be dispersed in the market.

1. Intensive Distribution: As many outlets as possible. The goal of intensive distribution is to penetrate as much of the

market as possible. 2. Selective Distribution: Select outlets in specific locations.

This is often based on a particular good and its fit within a store. Doing this allows manufacturers to pick a price point

that targets a specific market of consumer, therefore providing a more customized shopping experience.

Selective distribution caps the number of locations in a particular area.

3. Exclusive Distribution: Limited outlets. This can mean anything from luxury brands that are exclusive to special

collections available only in particular locations or stores. This method helps maintain a brand’s image and product

exclusivity. Some examples of companies that enact exclusive distribution would be high-end designers like

Chanel or even an automotive company like Ferrari.

Who’s Who?

The chain of distribution can get confusing as more people are

added into the mix. Distributors, wholesalers, retailers, and

agents all work as intermediaries in the sales process. It is

important to know the key differences of the individuals who play

a role in the distribution process.

Distributors: A distributor is a wholesaler who assumes extra

responsibility. In addition to fulfilling retailer orders, they actively

sell products on behalf of the producers. From managing orders

and returns to acting as a sales representative, they go beyond

being the middleman between retailers and producers. They

perform market analysis and are constantly searching for new

opportunities to achieve peak sales performance. A distributor

focuses on a particular area and market which allows them to

cultivate strong relationships with manufacturers. Unlike a

wholesaler, they most likely have a stronger affiliation with

particular companies. Distributors have a direct responsibility to

making sure products are flying off retail shelves.

For example, one distributor may work out an agreement with a

popular beverage company who works with them regularly,

whereas wholesalers are used on a need-by-need basis. They have

the option to sell to retailers and other sellers, or directly to

consumers and businesses.

Wholesalers: A wholesaler fulfills orders of retailers, by reselling

goods, often in large quantities for manufacturers. Wholesalers

purchase in bulk, typically, which lowers the price, from either

distributors or manufacturers. This allows wholesalers to make a

profit because they are able to sell the to retailers in smaller

packages that yield higher prices. Unlike distributors, wholesalers

only deal with the storage and delivery of goods. But, in certain

cases, you have to go through a wholesaler to get to a distributor.

Retailers: Retailers are the outlets where consumers can purchase

products. This is your local grocery store or Walmart down the

street. They can sell through storefront locations or through online

channels. Retailers purchase products from distributors or

wholesalers.

Brokers and Agents: Make way for agents. They handle the

logistics of the sales. Agents handle contracts, marketing, and

pulling together specialized shipments. A part of their job is

customer relationship management. On behalf of manufacturers,

they take ownership of products through the distribution process.

They represent the producer in the sales process.

Succeeding Working With a Distributor

When working with distributors, brands have a responsibility to

oversee the process and prevent retail execution errors like out

of stocks and distribution voids. This requires setting up clear lines

of communication between managers, sales teams, and

distributors to ensure you get that information as clearly and

quickly as possible. Brands that are on top of their game form

better relationships with their distributors and open up

opportunities for expansion much easier than brands that

communicate on an ad hoc basis.

While emails and text messages may suffice for quick fixes, these

simply won’t work long-term. Let's say your sales rep informs you

about an out of stock at location X. You might be able to remedy

the situation by contacting your distributor and ordering another

shipment to that location. But if location X is continuously

experiencing out of stocks, the trend may fly under your radar if

the only evidence you have is a few email threads buried deep in

your inbox. Your random ordering pattern may make it difficult to

forecast demand, or keep distributors and retailers from receiving

predicting shipments. This is where data tracking and analytics

become your best friend.

When you equip your team with the tools to constantly provide

you with field insight, any recurring issues will become obvious

much more quickly. Say that instead of you receiving an email or

text each time something was awry in the field, you received a

data point that you could instantly compare to past data and use

to identify any patterns instantly. Now, rather than your distributor

having to constantly fulfill last-minute shipments each time

location X experiences an out of stock, you can begin sending

extra product with each scheduled shipment, making your and

your distributor’s life easier.

With so many different orders to fill and clients to keep up with,

having a data tracking system in place will make your and your

distributor’s hard work worth it. If there is a hiccup in the

distribution network, you are empowered to glide past it with

ease and maintain a consistent presence on store shelves, keeping

distributors, retailers, and customers happy.

Download the exclusive eBook!

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[email protected]

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update with information

about other Repsly content,

products, or services that

may be of interest to me.

Add to the conversation below

Comments H I D E

Kyle Winters 8/2/2017, 5:49:13 PM

I didn't know that there was so much to learn about how

products are distributed to local chains, but this infographic

was a fascinating read. Intensive distribution seems like it is

the most common form of distribution though. After all, when

you're trying to sell something like food or drink, you'd want

to get it out to as many outlets as possible.

Melissa Sonntag

Melissa is a recent graduate of Northeastern

University and a content marketing specialist at

Repsly, Inc. She is committed to applying her

skills in order to bring value to Repsly readers

and customers. Outside of work, Melissa enjoys

practicing yoga, making music, and anything

dog-related.

R E P L Y T O K Y L E W I N T E R S

SUZEET SANKAR 2/28/2018, 1:18:46 AM

thanks for this information you shared, but do you have

anything relating to prices and stuff?

R E P L Y T O S U Z E E T S A N K A R

Oluchi Ndimkaoha 3/19/2018, 7:31:36 AM

very impressed with this write up.

R E P L Y T O O L U C H I N D I M K A O H A

Robert MacLeod 4/24/2018, 12:06:20 PM

Great, simple article to describe the actors in the distribution

arena. Can you recommend follow up content for further

conversation and more in-depth details? Thank You!

R E P L Y T O R O B E R T M A C L E O D

Michael James 1/3/2019, 6:06:18 PM

Greetings from Rutty Tech Store Plc in Belize. I would like to

place an order, However i would like to know type of

payment you accept if you do accept (Master Card or Visa

Card ) I will be appreciated if you return to us by email with

your new latest website. Waiting to read back from you.

Kindest Regards,

Director,

Michael James

R E P L Y T O M I C H A E L J A M E S

Naseem Baloch 2/16/2019, 7:23:12 AM

because i have a lot of employees

R E P L Y T O N A S E E M B A L O C H

Jill Eloisa Arevalo 3/6/2019, 12:19:42 AM

Amazing work! You did a good job and it is worth-sharing. It

will help and guide many readers and will continue following

more of your articles. You can also visit our website if you are

looking for Wholesale Products to Sell from Home. We also

offer different items just for you! Thank you and Godbless.

R E P L Y T O J I L L E L O I S A A R E V A L O

Lois Crain 3/11/2019, 10:05:35 AM

Question: We own a microbe company and have

distributors/dealers selling/distributing them for us. They

buy the product from us and sell it. We bottle and label the

product. What wording do we have to use in a contract to

ensure they are marketing/branding our product name? The

reason for this question is that they have their own 'company

name' but we want to be sure our product is branded and not

their company name - making it appear as if they manufacture

the microbes.

R E P L Y T O L O I S C R A I N

Peter Vinal 3/17/2019, 7:16:53 AM

Looking for distribution for new 2 time gold medal product

the Drink Genie. Www.drinkgenies.com. Under construction

for a few days. Also a childrens book,

www.chewythewoodchuck.com and a full length feature

dance film. daddy Cant Dance

Www.daddycantdance.com

R E P L Y T O P E T E R V I N A L

Aira 4/12/2019, 3:53:55 AM

What a meaningful work this is. Very inspiring and moving.

Thank you so much for sharing this incredible work of yours.

We will continue to support you. Meanwhile, are you looking

for wholesale distributors ? Feel free to check and visit our

site and look for our affordable items with a very nice quality.

Thank you and God bless!

R E P L Y T O A I R A

merian jesiel saldon 4/23/2019, 1:24:39 AM

maam we are currently conducting a marketing research

about breadth distribution of cassava chips , can i ask what

are the variables or factors to determine the breadth

distribution is ?

R E P L Y T O M E R I A N J E S I E L S A L D O N

Ryan 5/16/2019, 4:45:04 PM

Great content and visuals! It's incredible how much goes into

product distribution and how fast the industry evolves.

Agreed, a real-time data tracking system for logistics and

fulfillment processes is super important to keep all parties

happy and stay ahead of the competition.

R E P L Y T O R Y A N

Nindy Natalia 7/3/2019, 12:17:50 AM

It is really a great content, make me learn a lot about the

difference between every term.

R E P L Y T O N I N D Y N A T A L I A

ERWIN SALAS 7/12/2019, 8:52:47 PM

What an amazing post! I am a teacher in entrepreneurship

and this article is a very well condensed one about

distribution, just right to the topic and very well explained.

Congrats !

R E P L Y T O E R W I N S A L A S

Tope Farotika 8/15/2019, 12:09:48 PM

Thank you Melissa for this educative write up. For me, it's a

life saver.

R E P L Y T O T O P E F A R O T I K A

Karunamay Murmu 9/6/2019, 9:17:02 AM

Wow this post clear my all doubt

R E P L Y T O K A R U N A M A Y M U R M U

Terral Lawrence 9/25/2019, 10:59:15 AM

THANK YOU SO MUCH FOR THIS INFORMATION!!!

Reworking the Marketing Plan right now and needed the

insight.

R E P L Y T O T E R R A L L A W R E N C E

reputable student 9/30/2019, 6:33:22 AM

Thank you very much for adding such a significant post! This

is exactly what we need to know about product distribution!

R E P L Y T O R E P U T A B L E S T U D E N T

James Hintom 10/12/2019, 5:08:39 PM

Hello Sales ,

Many greetings from Jameshint Enterprises Inc ,We would

like to purchase some items from your facility to Bermuda.

I will like to know the type of credit card you receive for

payment and would also like to know if you allow a private

freight forwarder pick-up the items i intend to purchase ?

Thanks

R E P L Y T O J A M E S H I N T O M

Aminu Auwal 10/23/2019, 7:40:50 AM

I'm so happy to set my eyes on this amazing post pls keep

enlighten is good, your knowledge belongs to humanity,

thanks

R E P L Y T O A M I N U A U W A L

James Hintom 11/9/2019, 11:30:37 AM

Hello Sales ,

Many greetings from Jameshint Enterprises Inc ,We would like

to purchase some items from your facility to Bermuda.

I will like to know the type of credit card you receive for

payment and would also like to know if you allow a private

freight forwarder pick-up the items i intend to purchase ?

Thank you

R E P L Y T O J A M E S H I N T O M

Jayvee Santiago 12/10/2019, 7:46:06 PM

Your article is related to wholesale products to sell from home

which I’d love to read because lately I was looking for topics

that will help me in my decision making because we have

some plans to settle.

R E P L Y T O J A Y V E E S A N T I A G O

Jayvee Santiago 12/17/2019, 9:59:10 PM

I’m looking for writing that is capable to use for my projects,

so I wanna ask if it is okay to you if I include it to my project?

Because it was very good to work and really fits my project! I

find helpful is the wholesale distributors maybe it can be

helpful to you too

R E P L Y T O J A Y V E E S A N T I A G O

Jayvee Santiago 12/19/2019, 8:09:55 PM

You’ve got a good idea about cheap online shopping sites

because lots of people would not believe this kind of sites

because tWhen I observed your work, I just noticed that you

are a man full of knowledge especially regarding wholesale

market it looks like that you experience become a

businessman or just got a business.hey will think that all its

products are not in good condition or what they called low

class.

R E P L Y T O J A Y V E E S A N T I A G O

Nick Sciales 12/21/2019, 2:06:44 AM

Nice article on consumer product distribution. Found an

interesting article on the latest distribution technologies

available for the warehouses article.

R E P L Y T O N I C K S C I A L E S

Crevel Europe 12/27/2019, 2:28:21 AM

Distribution is very important in the wholesale business and

maintaining a good relation with the complete chain is

important. Thank you for sharing the post and details.

R E P L Y T O C R E V E L E U R O P E

Jayvee Santiago 1/2/2020, 6:44:28 PM

I’m looking for writing that is capable to use for my projects,

so I wanna ask if it is okay to you if I include it to my project?

Because it was very good to work and really fits my project! I

find helpful is the wholesale distributors maybe it can be

helpful to you too.

R E P L Y T O J A Y V E E S A N T I A G O

Regunathan Menon 1/14/2020, 4:36:53 AM

It is really useful, keep-up the good work Melissa.

R E P L Y T O R E G U N A T H A N M E N O N

SlankIT 1/29/2020, 9:43:53 PM

Nice Blog. Thanks for sharing. Visit https://slankit.com/

R E P L Y T O S L A N K I T

Rodrigo Aguilar 4/2/2020, 1:13:16 AM

than you

Melissa

R E P L Y T O R O D R I G O A G U I L A R

Kush Nambiar 4/16/2020, 10:24:38 AM

A neat and insightful article! loved it.

R E P L Y T O K U S H N A M B I A R

Pool safety certificate 4/29/2020, 5:44:49 AM

Thanks for the great post!

R E P L Y T O P O O L S A F E T Y C E R T I F I C A T E

Swapnali Yadhav 6/24/2020, 3:45:22 AM

Thanks for sharing a beautiful information with us. I really

appreciate Your blog. https://www.aekirana.com

R E P L Y T O S W A P N A L I Y A D H A V

K Cabiya 7/7/2020, 1:01:50 PM

Thank you for creating this. Used this for a school paper and it

was so helpful.

R E P L Y T O K C A B I Y A

vvvvv vvv 7/18/2020, 2:54:49 AM

India's largest wholesaler of agriculture products

www.vbmsale.com

R E P L Y T O V V V V V V V V

NandiniRaghu N 8/14/2020, 12:32:37 PM

Am looking forward distributor

R E P L Y T O N A N D I N I R A G H U N

Joy Mims 10/18/2020, 11:31:20 AM

Great Article! Insightful and focused.

R E P L Y T O J O Y M I M S

Arafath Khan 11/10/2020, 9:16:46 PM

Thanks for the great post!

Its realy nice

R E P L Y T O A R A F A T H K H A N

industrial roofing contractor in alabama

1/21/2021, 3:58:46 AM

Hi. you have posted great article, it really helpful to us.. I will

refer this page to my friends; I hope you will like to read.

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