The fact has been established that distribution business is an extremely profitable affair given you have the perfect strategy chalked out to help reach you the perfect customer to promote and accelerate your business.
Now that the profitability has been identified, many entrepreneurs have started this business generating tough competition. The only thing that will make you and your business stand out is the way you conduct your business. Now, how do you make your business stand out? The answer is to bring to existence that one perfect business model to grow your business for good.
What Exactly Is a Distribution Model?
A distribution model is nothing but an intelligently figured out way to make the goods and services reach from manufactured to the end consumers in the best possible and efficient manner.
The primary purpose of a sales distribution model is to deliver these prepared goods from the manufactures to the target customer base in the most cost-effective way.
A distribution model includes many factors such as logistics, transportation, warehousing, storage, channel management, and inventory management.
What Are The Various Kinds of Sales Distribution Models?
Broadly there are three types of sales distribution models designed such as Intensive or mass distribution, selective distribution, and Exclusive distribution.
Mass/Intensive Distribution Model
This is the sales distribution model where the goods and services are designed to cater to a broader market or goods are produced for a very big number of people to consume.
Try to understand it this way, if there is a business giant who produces its goods and services on a very large scale can not cover the entire geography to make its products accessible to each and every potential customer.
Nestlé is producing its products which are consumed on a very large scale, it will need this mass distribution model to get associated with many intermediaries to make things happen.
Selective distribution Model
This is the kind of sales model where a manufacturer designs a plan to provide their goods or services to a select few clients or minted number of retailers.
Selective distribution models can give an impression that the limited number of clients could hamper the growth and survival of a business, however, dealing with a select few clients also come with a lot of advantages such as the control of distribution chains and training your distributors. To state an example, if there is a manufacturer that makes crackers and deals in pyrotechnics, it will have a limited number of clients or resources.
Exclusive Distribution Model
This is the kind of sales distribution model that is adopted by a select few organizations. In this type of distribution model, the manufacturer of a product or service chooses to associate with one distributor or one type of distributor.
One of the benefits that come with this model is that the manufacturer or producer has the upper hand or greater control when it comes to distribution. The best example would be Rolex Watches or iPhones.
You will struggle to make your business a success if you don’t build and operate your business on an existing model that suits your business. Now, with a clear picture of all these sales distribution models in front of you, try to do some research to figure out what is that one model that will help you scale more in less time.