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Copyright 2006
Cornell University.
All rights reserved.



A business' distribution approach can determine its success or failure.

The company's product, business plan, target market, and production capacity all influence the distribution strategy. Your business can be an exclusive, selective, or mass distributor depending on the production and sales volume and your value proposition (covered in the Entrepreneurship module). The strategy should be consistent with the business plan and target market.

Many entrepreneurs start by selling products at craft shows and farmer’s markets

Four main distribution channels will be discussed in this lesson: retail, non-store retail, wholesale, and business customers. You could select one of these or become a multi-channel firm.

Shipping orders and reorders and organizing inventory (of materials as well as finished goods) is called logistics. Efficient logistics employing the latest computer and tracking technologies, such as bar codes and RFID tags, can lead to a smooth-functioning, profitable business, no matter what size.

Retail stores are one viable distribution method.

Technology can help

  • control your inventory
  • shorten the order-to-delivery time
  • replenish stock for major customers, and
  • track orders for you and your customers.

Distribution channels and logistics planning should be developed at the same time as product design, production, and marketing. Getting the product to the customer in a timely, efficient manner cannot be overvalued. Consider enabling technologies to make the process more efficient and to identify cost-making and cost-cutting procedures.

At the end of this module, you will be able to:

  1. Discuss the reasons to choose a mass, selective, or exclusive distribution strategy for your product.
  2. Compare the advantages and disadvantages of the available distribution channels for your product.
  3. Analyze two or three approaches to logistics that will be
    • Cost effective
    • Time saving
    • Customer involving
  4. Evaluate technology available for
    • Inventory
    • Order processing
    • Invoicing
    • Delivery options




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