PRODUCT DISTRIBUTION METHODS
The supply chain is one that starts from the producer to the retailer who then sells to the final consumer. The producer being in charge of manufacturing has to factor in the distribution process of the goods. It is not enough that a manufacturer produces a new product; he has to find markets that would ensure that the goods get to the retailer. How the goods would be distributed is left to him to decide. Distribution is basically the supply of the products of a manufacturer to retail outlets. There are several ways of distributing products. These ways are chosen by the manufacturer after considering several factors of cost, effectiveness and transportation. Some methods would be discussed subsequently.
First, the most popular form of distributing products is via the wholesaler also called an independent distributor. The wholesaler is a person in the supply chain that ensures that the goods of a manufacturer get to the retailer. He is usually paid a commission based on a percentage of the cost of the goods distributed. The wholesaler is beneficial in the sense that he has the connection of several retailers and he knows several retail outlets he could distribute to. A wholesaler has to work out the transportation and storage of the goods to the retail outlets. This is however reputed to be costly.
Second, the manufacturer could work with personal distribution. Personal distribution is when the manufacturer either personally or via his agents – employee distributors/ brand distributors – distributes the goods to the retail outlets. By this, the distributor is not an independent person who would be pay based on percentage but an employee who would get salaries, benefits and be entitled to promotion. These persons would have to be able to sell the benefits of the products effectively to retailers.
Third, employing marketers to work as rack jobbers in supermarkets and stores is another effective way to distribute a product. Rack jobbers are marketers who have a corner or a small space in a retail outlet where the sell, exclusively, the products of a particular brand. There are allowed to talk to customers, invite them to the retail space and discuss their products with them. Rack jobbers can be very effective because they a producer in getting personal contact with consumers. Final consumers may give feedbacks and reviews about a products and the rack jobber ultimately passes these across.
Fourth, online marketing is another effective way of product distribution. The internet is the world biggest platform. It is that platform that one can get the attention of millions within hours. A manufacturer can harness the power of the internet to do distribution and retail. For instance, some producers sell their markets in bulk quantities to retailers in other countries. These manufacturers open websites and have people order on it. The bulk price would already be online and when a retailer makes purchases, he gets delivery within a number of days. This has eliminated the need for a human distributor or wholesaler.