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Traditional/Conventional
Distribution
One might be confused between Traditional,
Intellectual and Technology based distribution.
Well Technology based
distribution is a conventional distribution system with the combination of
technology to it, i.e. doing a conventional distribution with the aid of
internet, e-commerce etc. While intellectual distribution is educating a consumer about a product or service
of which the consumer has never felt any need in his/her life and servicing
that consumer on a one to one basis using technology.
One fine analogy (of
intellectual distribution) is the use/popularity of mobile phones, which has
become a basic item in a man’s day today life.
Intellectual distribution is the latest trend
in distribution system, and is closely related to direct selling. In the future
most of the money will be related to this. The advantages of this system are as
follows.
•
Directly from
the Manufacturer
•
Using
Technology: e-Commerce
•
Consumer gets
a Chance to own the Business
•
No
Intermediates; hence benefits go to Consumer turned Business Owner
•
Anyone can
start the Business at a negligible investment
•
Warehouses,
show rooms, offices all operated by the Company; hence no overheads
•
Quality
guaranteed- 100% Product Refund Policy
•
No Risk – 100%
Investment Refund Policy
•
Unlimited
Income – Proportionate to the Efforts.
•
Creating a
legitimate safe and secure income.
Traditional
Marketing and Distribution
To understand more about direct selling and how
it works, one should firstly know how a conventional distribution works.
In a conventional distribution system there
will be minimum of 3 levels between the manufacturer and consumer. No consumer
can buy a product from a manufacturer. So it’s mandatory for some middle men to
fill the gap between a consumer and a manufacturer.
The usual levels in a conventional distribution
system are as given below:
- Manufacturer
- C&F Agents (Carrying and Forwarding)
- Wholesaler
- Retailer
- Customer
In some cases there maybe more than 3 levels
(such as advertisers, stockiest etc) between Manufacturer and Customer. Most of
the money for the product paid by the customer is gone to these levels before
reaching the manufacturer (and vice-versa). Around 60% of the price of the
product is gone to the C&F, Wholesaler and Retailer. (A product costing 40
Rupees to manufacture will be sold at the retail shops for 100+ rupees)
Additional to increase in price of the product,
there is another risk of getting the customer cheated if the retailer is
selling a duplicate product (substandard or old product) knowingly or
unknowingly, because usually a common customer cannot recognize quickly whether
the product is original or duplicate. The blame for the duplicate products
cannot be given only to the retailer, since he is getting the product from the
wholesaler and so on.
So the culprit for the duplication/adultery
obviously should be C&F, wholesaler, retailer or even a combination. The
manufacturers name can also get defamed because of the duplicate products. So
there is always a little risk to the customer, manufacturer and others when
they follow the same old distribution.
Though most of the people doesn’t know about
this, and even if they know it (nobody cares), and they know that nothing can
be done, because that is how the system works in a conventional distribution.
Smarter
Distribution
Though traditional distribution cannot be
removed totally, in some businesses the rules and system of the traditional
system is necessary. But in many areas we can introduce and some companies have
already introduced a smarter distribution system, named as direct selling
system.
In this type of distribution and there are no
middlemen between the customer and the manufacturer. The customer can buy the
product directly from the manufacturer. Obviously in such a type of
distribution the money that is given usually to the middlemen are saved which
results in the reduction in the cost of the product, an opportunity for the
customer to distribute/promote/advertise the product and generate money from it
etc.
Suppose a person buys toothpaste from a
retailer, he uses the product. He gets no benefits or recognition from the
manufacturer of the product because he bought that particular brand of
toothpaste (unless he is lucky enough to win a scratch and win).
This example will definitely seem to be
ridiculous, absurd and funny for the people who don’t know about any other type
of distribution other than the traditional distribution.
Also it is a matter of fact that one buys a
product only to consume the value of that product, no consumer expects the
manufacturer to help the customer or say a “Thank You” to the customer, and
it’s ridiculous even if such a thing happens.
But in the current era, it is time to change
the type of thinking of the customers mainly because of the advent of direct
selling in much type of products. To know more about direct selling, its
markets etc click here.
Direct-to-consumer Distribution
Unlike the traditional distribution, in direct-to-consumer
distribution, there are only two levels.
- Manufacturer
- Customer
Since there are no middle men in this type of
distribution, the consumer can take advantage of this in many ways, such as,
the:
- Customer gets the opportunity to promote the product and earn extra income.
- Customer can get a Retail Margin upto 20%
- Customer can get incentives upto 21%
- Customer can get Bonuses and other benefits.
Every customer has an equal opportunity to earn
an extra income (which is usually gone to the middle men, advertising, brand
endorsement fee etc in traditional distribution). That is a normal consumer gets an opportunity to
become both the company business owner and a consumer gaining upto 60% benefits
at the same time. It is infact a great opportunity.
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