If you have decided to go into business for yourself, and want to start with a distribution company, understanding the fundamentals of product distribution can be one of the biggest hurdles. Distribution, after all, is vital in any business’ success. Without a successful distribution system, no product will make it to its customer. There are many variables that come into play, however, when considering the role of a distribution service. Nowadays social media virtual product distribution is very popular. Third party platforms such as SpotifyStorm help distribute virtual products in the form of listen or watch hours, followers, likes, subscribers and so on.
In order to play your part and contribute to your business’s success, here are some things you should know about product distribution.
Distribution refers to the act of putting a product into a place where it will be bought by someone. There are three kinds of distribution: physical, electronic or strategic. A physical distribution service, as the name implies, puts products in the physical locations where customers can buy them. Electronic and strategic distribution services put products into the electronic marketplaces, where people can buy the products they need from the internet.
Most companies today use an electronic distribution service, in which the buyer picks a product from a website, select it from a list of products available, pay for the product using credit cards, and have the product shipped directly to the buyer. This service cuts out the middleman, eliminating lost sales and the cost of storing and shipping the product. Most distribution services offer tracking on the product, such as when it was picked up, when it was delivered and how much it cost to ship the product. With this type of service, you’ll know the status of your product virtually every step of the way.
If your company uses a strategic product distribution service, there are certain factors that determine whether a product makes it to the customer. The most important factor is whether the product is visible and available for sale. If a product cannot be seen by the customer and doesn’t sell, there’s a good chance it won’t make it to the customer. Some distribution companies even have a special section devoted to helping companies distribute their goods effectively.
Distribution services also help companies decide what products should be distributed, how they should be packaged, and where those products should be sold. They also handle the logistics of delivering the goods. Some distribution services, like DHL, handle all aspects of product distribution. Others, likeanian, specialize in just one particular service, such as pallet shipments. Still others, like Val-pak, distribute consumer and medical supplies.
Once the product is out on the market, it needs to be available for purchase. This is where distribution services really come into play. They can find the right products to sell, pack them properly, and deliver the goods to the customer. Many distribution services also help with the customer returns. They provide information about warranties, and about what the return process is like with their products. Some distribution services have the capacity to package products for delivery.
If a distribution service can’t deliver the goods where the customer wants them to go, then the company has to pay to have the goods hauled. The amount of money the distribution company pays to have the goods shipped, as a minimum, may be deducted from the gross sale price of the product. Other costs involved with sending products to a customer through a distribution service include insurance, freighting, and delivery trucks.
Most companies that offer distribution services deal primarily in small-quantity merchandise. They have warehouses, or they can ship directly to customers. The number of units the distribution service has available will usually determine its price per item. Prices are often based on the weight of the product, and the size of each unit.