Tips for building an online distribution channel
Online distribution frees you geographically. Where you might have been selling your product or service locally, opening an online distribution channel means you can sell it on a global scale, which is an effective way to grow your business and boost your brand. Many businesses have had to move their businesses online in recent months. For some, this has opened up new revenue streams to get them through the COVID-19 pandemic.
Identify what you can sell online
You’ll have an online presence with your website and social media platforms, and if you’re getting good sales locally, it could be time to set it up as an e-commerce site and your own online distribution channel.
Sell more than your product
With online distribution, you can open up your offering so that you’re selling more than just your product.
For example, if you’re selling power tools, you could also offer how-to videos via YouTube. Once your YouTube channel is operating, you can extend the how-to videos into information that people subscribe to, via e-newsletters, blogs, and social media.
You can also deliver your marketing material online through content marketing. Your website and social media platforms work together here, with social media driving traffic to your website where customers can access your content.
You can also expand the range of what you’re offering. For example, if you’re operating a gym, customers can not only join online, but you could also be selling workout supplements and clothing as well as instructional videos that you’ve bought via a wholesaler.
Decide what the best channel is
Once you’ve identified the products and/or services you plan to offer through online distribution channels, it’s time to decide which of those channels suits you best.
Third party distribution channels
This means selling your product through an already-established online channel, such as Amazon, eBay or iTunes. You might want to consider this before setting up your own channel, so you can determine if the demand is there.
Third parties already have payment options, warehousing, customer service and shipping already set up, so you don’t need to worry about them. What you should focus on is whether people want to buy what you’re selling online. If your sales are encouraging, then it could be time to think about selling your product online yourself.
For example, if you’ve created an application or game for smartphones, you could sell it on iTunes (owned by Apple) initially, to measure demand.
The drawbacks of using a third-party online distribution channel are that they’ll take a percentage of your sales as fees, and you don’t get the same customer engagement. As far as they’re concerned, they’re buying from Amazon, and you don’t get to connect with them the same way you would if they’re buying from you directly.
If you’ve got what’s sometimes known as a ‘brochure’ website – that is, one that briefly outlines who you are and what you do – then it could be time to redevelop it into an online distribution channel – an e-commerce site:
- Your website is ‘open’ 24/7, so potential customers can browse, research, book and buy whenever they want – not just between 8 am and 5 pm.
- A website means you can reach people worldwide. You could easily find yourself with a number of international customers, which could leverage into exporting opportunities.
- Better customer experience – people like buying products online, the option of an online booking system, and researching before they buy.
- Reducing costs – for example, if you’re selling a skin-care range, you’re saving on shelving, displays, rent, and rates. You’re also saving on staff costs because you don’t need to run a bricks-and-mortar store.
Set up payment systems
You can take payments online with an e-commerce site, allowing customers to buy products from anywhere. PayPal makes it easy for customers to pay you online, but it’s just as effective to get a credit card option set up on your site.
Talk to your bank about the payment options they have available. Mobile and online solutions are becoming an increasingly popular option, especially for online distribution channels. It doesn’t all have to be done with a credit card.
Set up delivery systems
If you’re using a third-party distribution channel, these will be set up for you, since they’re the ones doing the actual shipping, and they’ll have delivery systems in place.
When setting up your own, it depends on what your product or service is. For example, think about when you might have bought a book from Amazon. There are terms and conditions attached to the sale that you must read and accept before you make payment, and when the book’s delivered, there’ll be an invoice included.
Review what you’re selling and decide on what customer contracts or service level agreements need to be in place so that you’re covered if there’s a mistake with shipping.
Getting your products or services onto the global stage is an effective and relatively easy way to grow your business and increase sales. Not only that, but you’re going to expand your customer base to include many international customers, and that’s going to be a great boost for your brand. Selling your offering online also reduces costs, especially rent and staff expenses, so you’ll be improving your cash flow. Online distribution channels are also a great way to start out if you’re planning to move into exporting since you’ll get a feel for the international marketplace and make important contacts.
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