Product Distribution: Informative Guide in 3 Easy Points

Ajay Ohri


For people who are not familiar with product distribution in marketing, this article is for you. With the expansion of the new markets with the simplest brands know that staying on top of their entire sales process is critical to seal the deal. You cannot really make good sales if you do not stick to the process of distribution. The product distribution is one of the most important steps that always goes overlooked as brands choose the most cost-effective options of the distribution strategy.

In this article, things such as implementation and complete distribution process will be shared with you to give you a brief understanding of the process and to strategize and analyze various aspects. 

  1. What is PD?
  2. Various Product distribution channels and Stages
  3. Product distribution Companies

1. What is PD?

Let’s understand the concept of distribution. what is product distribution? It is the process of delivering the products and services along with selling them from a manufacturer to a customer. With the growth of the company, it becomes more important to improves the distribution to ensure that all people in product distribution channels are happy. It makes the product available for purchase by spreading it through the market. The product distribution system includes packaging, transportation, and delivery process. There are many people involved in the network of distribution depending on the strategy involved. 

2. Various Product distribution channels and Stages

It refers to the flow of the business starting from a manufacturer to the consumer. Some intermediaries deliver the products from the producer or manufacturer to the retailers for sale. The product distribution methods can be either simple or complex depending upon the system. The two distribution channels are direct as well as indirect channels. 

The direct channel involves the producer with the consumer. The producer or the manufacturer are in direct contact. However, the case of the opposite in the indirect channel. In the indirect channel flow, the intermediates are involved in the sales flow. If you are totally new to the business, you need to know the whole flow of work. 

There are four levels of product distribution business between the manufacturer and the consumer. All these stages of the product distribution system are involved in different types of business. 

  • Stage zero is the simplest form of the channel which has no intermediator and the sale directly involves the manufacturer and the consumer.
  • Stage one of the distribution channel involved a single intermediator or the middleman in between the producer or the manufacturer and the consumer. The perfect example is the retailer between the producer and the consumer,
  • Stage two includes two or more intermediates involved in the process. Two intermediates are involved between the producer and the consumer. A great example will be a wholesaler sells the retailer and the retailer to the consumer.
  • Stage three involves the agent or broker. The job of these agents is to work on behalf of the company dealing with wholesalers, the chain involves wholesalers who sell retailer and retailer to consumer.

Now, let’s have a look at the types of product distribution: 

The product distribution strategy or system depends on the products which are being sold in the market to achieve the goals. There are three methods of distribution system which depicts how the manufacturer will choose the products and services to be dispersed into the market.

  1. Intensive Distribution: The strategy of the intensive distribution system is to penetrate the market as much as possible.
  2. Selective Distribution: These include select outlets in specific locations that are based on the particular good within the store. For a customized shopping experience that targets the specific markets of the customer.
  3. Exclusive Distribution: These include limited outlets. These include special collections and stores with luxury brands. It is mainly helping the brand maintain its image and strategy. Examples are high-end designers and even automated companies such as Ferrari.

The distributer’s profile includes the distributors, wholesalers, retailers, brokers, and agents to fulfill the product distribution process. 

3. Product distribution Companies

The product distribution companies follow the distribution management process. Distribution management refers to the resources and processes that are wont to deliver a product from a selected location to the point-of-sale, which incorporates storage at warehouses, retail distribution points, shipping, and delivery. The warehousing can ask where you select to deal with products. The next is the packaging which is always the most important factor, as usual, everyone wants to form sure your packaging is efficient so products are often safely shipped. 

Clear communication is very important in this process for vital success. This is often to make sure that the right products are shipped and customers know once they will receive their items. Another important aspect is logistics which is required to believe how products are getting to be shipped. The transport services used in the process are very important due to the timely delivery of the product according to the standard duration. If they require overseas shipping there must be agreements in situ for permits to be approved quickly. 

Inventory Management, proper inventory management is vital to distribution. Managing your inventory is one of the core pillars of distribution management. We’re always talking about ways to optimize inventory. Order Processing is when a customer places an order, distribution management must plan for the delivery of that item which involves collecting the stock, loading it, and delivering it in a timely manner. Invoicing steps should be followed and validated. This is the whole product distribution process that companies follow for the smooth functioning of the delivery of products. 

When we are working with the distributors, the brand strategizes with overseeing the process and need to prevent retail execution errors which include stocks and distribution system. This is done with the new product distribution opportunities in the market. The communication between the managers, sales, and distributors should be clear to process the distribution process for the transfer of clear information among them.

The companies sign up a product distribution agreement with the distributors for the easy and smooth functioning of the process without any violation. The big brands are toppers in this game with better relationships with the distributors. This also helps the brands to open up opportunities for expansion for easy communication.

Traditionally the process was over phone calls, however, this does not really work which brings the data tracking and analytics system into place. These tools are highly helpful and equipped to provide any insights related to the field. This tool instantly gives you access to the past data which makes life quite simple. Rather than your distributor having to constantly fulfill last-minute shipments, the tool makes life easier by immediately sending an extra product for the fulfillment of the shipment. 


Interested to learn all about Product Management from the best minds in the industry? Check out our Product Management Course. This 6-month-long program takes place online through live instructor-led sessions. It is the only program in India that offers the ‘Bring Your Own Product (BYOP)’ feature so that learners can build their product idea into a full-blown product, and go through an entire Product Development lifecycle. Not only this, but this is the only program in India with a curriculum that conforms to the 5i Framework. Post completion, learners receive a joint certification from the Indian Institute of Management, Indore, and Jigsaw Academy. 

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