Choosing Sales And Distribution Channels





Your Experience
Your Solution

Choosing sale and distribution channels becomes a hectic decision. It is difficult to sell your products to retail so you are selling your products to anybody that will buy them, which is not working either.

Make the right choices from the very beginning. Group the sale channels and start with the companies that fit your size and that do not compete head-on with each other. Use the distribution channels actively to get contacts inside the sales channels.


Choosing the right sales channels

Success grows on success. Big off-line retail chains have a tendency to deal with very few big vendors and/or distributors. If you are a small vendor, start by selecting the retail company that fits the size of your production and company. If you have a small business and you select a large retail chain you could risk the following:

  • Unable to deliver products fast enough, incase of success; they get products elsewhere
  • Unable to take back a major portion of returned products; if required
  • Unable to support the chain with education and/or information
  • Unable to control the sale
  • You might go bankrupt if they don’t pay at the agreed time· Unable to support the required cost for catalogues and/or shelf space and more
  • Your production and/or distribution of a large order might take to long
  • You risk a negative image from the start, if you fail the above

Carefully select the retail chains that fit your size. Use the experience you get there and make the necessary corrections of your organization and/or products; and create bigger successes at bigger chains.

Write down all the potential retail chains that you would like to sell to and divide them into groups in which each group does not compete head-on with the other groups. For example, you would put Best Buy and FRY’s Electronics in the same group, and and Sharper Image in two other groups. Write down a few key points about the retail companies, such as:

  • Which group do they belong to
  • Type of store (Internet vs. Conventional)
  • Relevant product selection
  • Type of customers
  • Size of sale
  • Number of stores
  • Where the stores are geographically
  • Rank the retail chains as to how well they fit your business
Focus on the groups of sale channels that understand your products (see Category Management), which will tell you if they deal with your kind of business. Look at the stores ranking and select the sale channels within each group that does not compete head-on for your first contact, giving them some exclusivity. Depending on the level of difficulty getting acceptance from the sale channels, you can then expand the companies to contact. This gives you experience and control, which will insure your success.

On-line stores vs. Off-line stores

You will find it MUCH easier to get your product into On-line stores than Off-line stores.

On-line stores take close to all products since they have no shelf space limitations. However, they require purchase of their “advertising” space. The cost comes with the advertising, which can be very expensive. 
Off-line store are limited by the shelf space and you therefore have to push out another product in order to include new products.

Choosing the right distribution channels

Whether you are big or small, you should consider using distribution companies. They give services ranging from buying your products as a middleman, to just delivering the products from one place to another,  often giving you good information about the different retail chains they deliver to. Figure out what your company should outsource then find the distributors who understand your product type.

One of the good things about using a distributor is that they already have a connection to a range of sale channels. Your product becomes a part of their portfolio and disposed for their sale channel. You do not have to sell exclusively through one distributor; you can combine their sale channels with your own and other distributors.

Distributors tend to focus on big companies and might find your company too small. The advantage of a big distributor is that they are everywhere. However, since they are so big, your product risks drowning in the ocean of products they already carry. Smaller distributors might give your product better attention, but the drawback is they distribute to fewer places and have less power. This area is in need of serious research and resolution.

All in all the distributors might be able to give you some key information about their sale channels, including an introduction to the right buyers; use this vigorously.

Jens Welling


The author of this article Jens Welling has worked with retail purchase, retail sales and retail marketing over the last 15+ years. Jens Welling has written a number of articles as a good source for any new and established company who want success with retail sales. Below are short descriptions and links to other articles.

Why You Have To Do Your Homework
Selling through retail is one of the toughest sales channels there is. Reactions come instantly. There is no mercy for mistakes in retail sales. One word covers what you need: Preparation. ...Read more

Choosing Sales And Distribution Channels
Make the right choices from the very beginning. Group the sales channels and start with the companies that fit your size and that do not compete head-on with each other. Use the distribution channels actively to get contacts inside the sales channels....Read more

Category Management
Learn to understand and use Category Management to your advantage and earn money....Read more

Unique Selling Points (USP)
Take the time to find out exactly WHOM your consumers are. You need to find your Unique Selling Points (USP). Once you get to know them, you'll know what to say to them!...Read more

Price Strategy
Right from the beginning, you have to be aware that On-line stores will “dump” your prices if you are not in control. Base your price strategy on your long-term goals: Where you want to sell the most products....Read more

What The Buyer Wants To Know
The buyer does NOT want a lot of information. He/she is living in a very high-paced environment and only wants your information in brief bullet points. Follow some simple rules and you will give the buyer what he needs....Read more

Exit Strategy
You must prepare your business for the anticipation risk of large quantities of products to be returned. You need an exit strategy. The returned products can be used to create new sales channels and partnerships, turning this somewhat hopeless situation into a profitable one....Read more

Price Setting
Consumers have psychologically priced a product with a certain amount that they are willing to pay (price point). If you exceed their psychological value, you risk failing in retail....Read more

Negotiation Tactics
It is obvious to focus on price as a sales factor. However, help yourself by prepare for negotiation tactics by highlighting the other Unique Selling Points (USP) - and at a minimum explain the price per performance compared to competitors....Read more

Rejection From Buyer
The buyer can reject you for several reasons. You must talk to the buyer to find out exactly WHY you got rejected.....Read more

Marketing Strategy
Selling to a retail chain often means you have to advertise in their catalogues, newspaper ads, etc.
This alone does not create a brand; you must also supplement the retail advertising with your own marketing strategy....Read more

Education Management
Your energy must focus on the stores (retail training). Face-to-face education is the most effective but also the most time-consuming and expensive....Read more

What retail warranties are you ready for? Depending on your sales channels, you must consider the quantity of products that may be returned...Read more

Building A Brand
You must raise the consumers' awareness and perceived value of your product through brand development.
Once you do this, consumers can and will identify your product as a brand....Read more

A high tech vendor will eventually have late delivery of products regardless of penalties. So what should a vendor do when the logistics fail?...Read more

Keeping Your Store Sales Alive
Keeping your retail store sales alive is a never-ending process....Read more

Product Development
One of the advantages to having a relationship with the sales channels is that you can discuss future product development....Read more