How to Define Distribution and Delivery in Your Business Plan
Distribution and delivery is an important part of your business plan. How you get your products and services into your customers’ hands is what distribution and delivery is all about. Not all businesses are equally concerned with distribution and delivery systems, of course.
For example, phone and e-mail access, along with a means for personal transportation, may be the extent of your distribution and delivery needs if you’re a psychologist whose clients come to your office for counseling, or if you run a freelance design business or a dog-walking service.
For some businesses, however, capabilities in distribution and delivery are important, if not downright critical, to success. Consider these examples:
Every time the holiday season rolls around, catalog companies and online retailers face the same nail-biting challenge: how to ensure that customer orders reach their destinations in time for the big day. Some retailers absorb overnight express delivery costs in order to meet promises. A few companies have seen their reputations plummet — and their customers disappear — when they’ve missed delivery deadlines.
One of the biggest challenges for new product marketers is getting valuable shelf space in retail outlets. The same goes for food manufacturers. With grocery store aisles already overcrowded with thousands of products, achieving store visibility for a new breakfast cereal or snack chip is a tall hurdle to clear.
Even businesses in service industries sometimes have to focus on distribution and delivery. Management-training companies, for example, often deliver programs to thousands of managers in dozens of locations — all at the same time. They can’t deliver on their promises unless they have trainers and equipment in place when and where they need them.
Those who do business primarily online have distribution challenges of their own. They need sites that load quickly, with easy navigation, links that work, and live help options for those who need them. If sensitive information is requested, they need secure web connections. They also properly need to deliver digital communications and with protections from abuse or subsequent free distribution.
And if they provide help or customer service, they need to consider online chat software, backed by staffing that ensures acceptable wait times. Plus, they need good search engine optimization (SEO), to up the odds that they end up high in search results, along with an aggressive program to drive traffic to the site through marketing and online link-building.
Failing to plan for the method and cost of distribution or delivery can be a fatal mistake. Consider the Internet grocery service that staked its reputation on the promise of free delivery on orders of any size. Customers accepted the offer — ordering a single frozen dinner or a bottle of wine. Delivery costs ran more than $10 on each order. It didn’t take long before the business promise faded away.
Assess the importance of distribution and delivery to your business success by filling out the Distribution and Delivery Survey. Be as specific as you can. Flag areas where you need to track down more information and then do the necessary research.
As you complete the form, consider the following:
Include all costs involved with product distribution and delivery — including warehouse space, transportation, shelf space allocations, product returns, and other necessary expenses.
Consider how you can use distribution and delivery to your competitive advantage, for instance by offering home delivery, subscription delivery, online service, or other approaches that fit the realities of your product and the desires of your customers.
View distribution as an expansion strategy, looking for new distribution channels — new paths that your products follow from your company into your customers’ hands — as a way to expand into new markets. Offering your products online, for example, or through new distributor or retailer relationships, allow your business to open new distribution channels.
Assess the importance of distribution to your business success. If you think it’s an essential element, include a description of your distribution system in your written plans.