Having a strong product is utterly important, regardless of the market you’re operating on, but it truly does very little for your business if you can’t get the product to customers conveniently and easily, because this is what consumers want these days: an easy way to order goods and a fast delivery system. In fact, fast delivery has been quite the focus lately as e-tail giants like Amazon have put a great pressure on smaller businesses with their free or quick delivery options. To that effect, distribution systems have become even more important and many efforts need to be put into designing the best system for your business. However, distribution decisions don’t start with transportation channels or delivery methods, but with a very basic aspect: product storage. When it comes to tangible goods, establishing the best facilities for storing products is crucial, reason for which stockroom and warehouse shelving and racking is no longer regarded as standard and innovative solutions are constantly sought.
Although investing in a cutting edge warehouse shelving system or a top notch racking design for your warehouse is the primary step in creating a strong and effective distribution system, determining what’s the right investment for you requires having an end goal in mind. Therefore, you might want to walk through your distribution system backwards, from creating a delivery system that takes the product to the customer to ordering products from the manufacturer and loading them into your warehouse. If the end goal is speedy delivery, then the transportation method you choose should be the fastest one. However, delays in product handling can also impact the speed of delivery, so you need not only pay for the fastest routing, but also make sure your products are picked up by delivery network in time. This means your warehouse team must have the products packed and ready to go in a certain time frame and this leads to you taking a close look to warehouse operations, how products are handled, how they are loaded and picked and how one storage system or another can improve these processes as to support speed of operations.
Decide what distribution channels you need
A distribution system is made out of several different channels, as moving products from manufacturers’ hands to customers’ hands takes many involvements. Very few companies handle all their distribution needs and functions on their own, because most of the time it doesn’t make sense to do so. However, some parts of the system you might be able to handle yourself, such as picking and packaging, only relying on other channels for the actual transportation of goods, such as parcel sending. There are some basic tasks involved in a distribution systems, such as ordering, storage, handling and shipping, and while some you can perform and manage in-house, others need distribution channels which you have to decide upon, find and engage.
Decide on channel arrangements
After you have made a decision with regards to the basic aspects of product distribution, such as investing in the right type of warehouse shelving or investing in automated product handling equipment to improve speed of operations, and you’ve established which channels you need, the only decision left is with regards to arranging independent or dependent channel relationships. Entering an independent channel arrangement may provide you with the flexibility you need to move away from systems that are not working to your benefit, but it is also less stable, as all members within the channel are free to act as they feel best. On the other hand, a dependent channel arrangement establishes the exact way in which products are distributed and members cannot change these terms.