When distribution can kill

Threadwatch covered a story, where a manufacturer of healthcare products expressly forbid it’s distributors from selling the products online.

The initial response is one of disbelief.

After all, the internet is the world’s largest marketplace. How could it possibly make business sense to disallow such a powerful distribution channel?

And there lies the rub - powerful distribution channels can destroy a company.

As endot put it:

Standard Process isn’t allowing people to sell their product online because they can’t control the price, marketing, and the overall image a random website would give their product and company.

Old Sage RC Jordan posts a link that really polishes the issue: The Wal-Mart You Don’t Know.

The article in short: Wal Mart is a huge distribution channel that encourages lean bsuiness development to serve bargain basement consumerism. But it’s not a business model every company can work with and survive.

Point is, there are different business models pitched at different levels of market - some pitching on lowest-price and high volume, and others on high-price and low volume.

Both are valid and profitable business models when done right.

The lesson is, confuse which business model you’re in, and your distribution policy can kill your business.