Select a Distribution Strategy that Works (Part II)
“The ones that wouldn’t be cost-effective to target directly,” Numo clarified.
“Yes,” Lucy said. “We’ll give away a little more profit than we would if we were selling directly to retailers, but, in exchange for paying another middleman, our products will be available in more stores than we could handle on our own.”
“Perhaps a combination of distributing products through wholesalers and retailers is part of our sales growth solution,” Org said. “We target the big retail outlets like Olympus Mart directly and use wholesaler networks to reach the smaller but important shops as well.”
“Bullseye,” Lucy replied.
“I feel like we’re missing something,” Zoot protested. “I don’t know about you guys, but I make many of my purchases—custom-embroidered togas, gold-embossed sandals, even wine refills from Dionysus’ Winery—through these company’s O-sites.”
“There’s no question that more and more Olympian consumers are turning to the expedience and convenience of the O-line shopping experience,” Lucy agreed. “We’ll talk more about O-line distribution strategy next week.”
“Sounds good,” Zoot said, just as a bedazzled turquoise toga in Olympus Mart’s window caught his eye. “Speaking of retail selling, how much is that toga in the window?”
Today’s FIRE! Point
Selling through retailers and wholesalers improves a company’s market reach. By supplying goods directly to retailers, especially retail chains, businesses can reach smaller customers that would be too costly to sell directly. Distributing through a wholesaler network is another distribution strategy to consider. Wholesalers can help you efficiently reach smaller stores that wouldn’t be cost-effective to target directly.
FIRE! In Action
Finale Desserts Finds Profits by Shifting to Wholesale
After struggling to find a retail niche, owner Paul Conforti decided to push his product to wholesalers. A year after switching channels, the pastry business had 60 distributors and had generated more than $1 million in sales.