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How to Explain Direct Distribution Channels

Posted on February 25 2021

Defining a Direct Distribution Channel

Defining a Direct Distribution Channel

If you are a startup business or thinking about starting a business, I know it can be overwhelming at times. Making the right decisions for the greater good of your brand is stressful. Still, understanding what you need and the process of how to attain it is something that cannot be skipped over. This is where distribution channels come into play. So what is a distribution channel? Well, to put it simply, it’s the flow of a good or service that goes from the manufacturer to the consumer. Today we’ll be focusing on the direct distribution channel that does exactly that. This is just one type of path you can take in the world of distribution. For the benefit of your business, we are dedicating a series of blogs that will break down what you need to know about distribution channels. So, keep an eye out for the rest of your need-to-know information.

Defining a Direct Distribution Channel

 

Let’s Start With the Basics

Before we get into the specifics of what a direct distribution channel is, there are two key terms that need to be defined:

Manufacturer - A person or company that makes goods for sale. QQ Studio is an example of a manufacturer that produces and advertises their own packaging. As a result, we are able to offer higher quality materials and products in bulk. We are in control of what we want our bags to look like and how durable we want them to be.

Consumer – A person who purchases goods and services for personal use.

If you are someone looking to start your own cookie company, the ultimate goal is to produce original cookies that will reach end consumers. Now the question is, how are you going to produce this product? Should you go to a large scale manufacturer? This is a valid concern that should be running through your mind.

Defining a Direct Distribution Channel

 

 

Direct Channel

A direct distribution channel is one of the most simplistic approaches to getting a product to the end consumer. This process involves a straightforward transfer of goods from the manufacturer to the consumer. There are no middlemen involved in getting the product from one place to another. Now, let’s evaluate the pros and cons of choosing this method.

Pros:

  • You are cutting the costs of the commission that intermediaries would normally charge.
  • You have more control over how you want to market and sell your product.

 

Cons:

  • When you go directly to a manufacturer, you will need to buy an extremely large quantity of products. Unless you will be able to sell all of the products you purchase, there’s a good chance you would be losing money in the end.
  • There are more responsibilities to take on because you are cutting out the work that intermediaries would normally handle.
  • You will have additional costs of needed inventory and advertising.

It’s safe to say that if you are just starting out, going directly to the manufacturer isn’t the best move yet. When the cons outweigh the pros in any list, there’s a good indication that it’s not the method for you.

Defining a Direct Distribution Channel

 

 

What Can You Do?

If you’re starting out from square one, you aren’t going to have the largest clientele. Instead of going to a manufacturer, you can simply buy the small amount of ingredients and materials you need from a retailer and make cookies to distribute yourself. At QQ Studio, we are in the unique position of being both a manufacturer and a wholesaler. This means that we are also able to offer low minimum order quantities of packaging for your cookie business to try out and get started with! Once you have your product ready to go, you can then create a website to sell the cookies, go door-to-door, or reach out to people you know who might be interested. At the same time, you should be creating a social media presence to advertise your cookies. It’s always best when customers can put a brand name to a product. Once your business starts to take off, then you can consider other ways to product and distribute your cookies.

Defining a Direct Distribution Channel

 

 

Overall

I hope you were able to learn what a distribution channel is in a digestible way. We’re only scratching the surface. When it comes to packaging and distribution, there are plenty of factors that you should consider. I encourage you to stay in tune with us to find out more information that will help your business succeed in the long run. For now, we have other packaging blogs that you’ll find helpful. If you like this blog, check out our other one on how to effectively communicate with your customers on social media.

 

Defining a Direct Distribution Channel

 

QQ-Tip: Always evaluate how much inventory you’re buying in correlation with how many products you’ll actually sell. This will help you in determining what distribution channel is right for you!

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