Where will your product be sold? Choosing a distribution channel is a process of considering many factors and thinking about your long term business goals. Finding the best distribution options for your product can have a huge impact on sales and the long term success of your business. New products, in particular, need the right distribution channels to get noticed.
What is your product positioning strategy?
Before you begin searching for distribution channels for your product, it’s important to think about how you want to be positioned in the marketplace.
Consider the following:
- Product Class
- Target Audience
- Brand Image
To figure out where your product fits, it’s good to spend time analyzing your competitors. Think about the unique value you are offering and how you are going to express that to customers. Knowing what products will likely be next to yours on a shelf can help you think of ways to set yourself apart.
Who is your product designed for and where are they likely to shop? How will you draw new customers to your product? How will you communicate your unique selling points to people who are unfamiliar with your brand?
What is your brand all about? Is it fun and quirky? Eco-friendly and all-natural? Are your products accessible or high-end? Finding the right distribution channel will help you solidify your brand image in customers’ minds. For example, if your product is a high-end moisturizer, selling it in gas stations and on Amazon could hurt your brand image. A more appropriate location would be stores like Ulta and websites like Goop or Blue Mercury. While it’s tempting to sell your product in as many places as possible, carefully choosing your distributors will benefit your product and brand in the long run.
Analyze the competition
Take a look products similar to yours and ask yourself if they are missing a feature that your product offers. Can you win over customers with your unique offering? Where are your competitors selling their products? Have they missed a distribution channel that you can take advantage of?
What do your customers value?
Think about the values of your target audience and if certain distribution channels can deliver on those values. For example, are your customers thrifty and looking for the best deal? Or are they looking for luxury and willing to pay more or wait longer for delivery? Will they be more likely to buy your product if they can experience it in real life, rather than buying it online? It’s important to consider what motivates your target audience when choosing a distribution channel.
Different distribution channels have different costs associated with them. Marketing and selling online can save you money, but there are still costs involved. Websites like shopify and Amazon will charge fees and you may want to pay for things like boosting your social media posts. As a small startup, you may be able to store and ship products from your home. As your business expands, you will eventually need to find a warehouse to store and ship your products from.
Costs may include:
- Administrative expenses
- Costs associated with storing and shipping your product
As your business grows, so will your warehousing costs. Planning ahead can help you avoid unpleasant financial surprises and keep your business running smoothly.
Finding your place
Finding a distribution channel is part of “Place,” one of the four “P’s” in marketing.
The four P’s are:
Finding appropriate places to sell your products helps you maintain your brand image and reach your target audience. It can also give you a competitive advantage over your competition. It’s an important part of your overall marketing strategy.
What are your options?
Here are some distribution channels to consider for your product:
- Direct/Sales Team (pop up shops, product parties, event booths)
- Direct/Television Shopping Network
- Wholesale/online platform
- Wholesale/Retail stores and boutiques
- Wholesale/Sales Representative
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