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What Does Distribution Mean For a Company?

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In order to understand what distribution means to a company, you need to first know what distribution is. Distribution is defined as the method to store, process, and ship goods. This involves receiving inventory, storing it, repacking it for later shipment, and shipping.

In reality, at least going by business standards, distribution is part of marketing. It is the fourth aspect of marketing. Why? Because it acts as the middle guy in getting the goods from one place to another. The process works like this: A product is manufactured and then it is stored in a warehouse awaiting shipment. The product is sold to retailers or directly to customers. Just in case you are wondering what the other three aspects to marketing are, they are product management, pricing, and promotion.

When you deal with distribution, you are dealing with the logistics side of the business. This concerns how to get the product from point A to point B or from the supplier to the customer. In order for distribution to work correctly several key factors must be analyzed. The factors include:

• Distribution channels: What kind of distribution channel should our company use? Should we go with a standard route or one that is more specialized?
• Should we sell our product through a retailer or distributed by way of a wholesaler?
• What kind of marketing should we use to accomplish this? Should we stick with the local market, or broaden out?
• When should the product be available? Should it be released to the public now or later? If now, is this the right timing for it?
• Should we use formal (contractual) means of distributing the goods or go by informal means?
• How about electronic distribution? Should we use this method since the Internet is used so extensively?
• When we do distribute our goods, are there any barriers we must consider before we proceed? What about distribution points? What about a physical place?
• If products have to be stored as inventory, until they are sold, what will it costs to house them until sold?

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