Channels of distribution

After positioning your product or service in the right niche, the next step is selecting distribution channels with the right marketing and sales representation.

To compete, it’s important to focus on channels where you’re confident you can take significant market share.

Definition of channels of distribution: “How you get your product or service to your customers.”

Practice Summary


  • Retailing
  • Wholesaling
  • E-commerce
  • Franchising
  • Sales force
  • Dealer network
  • Reseller
  • Catalog sales


  • Lowest costs of entry compared to the competition, including marketing costs
  • Least financial risk and lock-in
  • Pricing and volume levels to provide acceptable company profit margins
  • Geographic coverage


  • Evaluate what your end-users need in order to buy
  • Match end-user needs to channels
  • Identify natural partners that already have relationships with your end-users
  • Service your channel partners
  • Minimize price conflicts between channels

3 Good Questions

  1. How does our mix of channels affect operations?
  2. What can disrupt our channels?
  3. How do we analyze the risks and costs of each channel?

Pandemic isolation has changed how products and services are sold, so managers are giving even more attention to e-commerce. E-commerce sub-channels can be optimized through search engine optimization (SEO), social media advertising, and professional design:

  • Content marketing that’s genuinely helpful: videos, podcasts, e-booklets, etc.
  • Email marketing that doesn’t annoy
  • Social media that’s truly social

And don’t forget you need to be able to collect people’s money as easily as possible. Have you asked your customers recently about their online experience?

Relevant Terms

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