Building online distribution channels

Third-party distribution channels

This is 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 or not 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.

Working with a merchant services partner like Heartland can be a great way to accept payments online from customers.

Your website

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 your own online distribution channel. Consider these benefits:

• You can take payments online, 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.
• Your website is ‘open’ 24/7, so potential customers can browse, research, book and buy whenever they want – not just between 8am and 5pm.
• 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.

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.

Summary

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.