Distribution Strategy Business Plan

Pages: 3 (966 words)  ·  Bibliography Sources: 0  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

Distribution Strategy

The product will be distributed from our warehouses to the contractors. The contractors will install our product in the new homes. The distribution will be done by truck, on a per-order basis. There are a couple of reasons for this. The first is that trucks can carry heavy goods at a relatively low price. They can go to remote sites -- some new housing developments will not even have completed roads when delivery is made. The use of a centralized warehouse is essential. The packages are put together using parts from different suppliers. They are assembled at the same warehouse facility that will serve as the shipping point. This facility will be centrally located on the Eastern seaboard. When we expand beyond this geographic area, we will likely build other warehouses to help reduce shipping times. In addition, the use of trucks is efficient because most orders will be for entire new developments. This will allow barriers for multiple units to be distributed in a single truckload.

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2. The company at this point derives little value from its distribution method. The assumption that shipping entire truckloads will be possible is just that -- an assumption. The reality could be individual sales that make for inefficient distribution. Discounts for early payment are standard in the industry, and so they will be used by our firm as well. The terms will not be unusual -- 2/10 n/30 would be common. There will, however, be volume discounts that are given to entice larger contractors. Being able to ship entire truckloads will save the company a significant amount of money and some of that will be passed onto the high volume buyers. The discount will be offered on a sliding scale -- the more barriers are purchased the greater the discount.

Business Plan on Distribution Strategy Assignment

In any one area, no exclusive distribution rights will be given. The primary objective of the company during the launch and growth phases is to increase the market share. The best way to do this is to open sales to all customers. No territorial rights will be given. The volume discount will apply to all contractors and homeowners who qualify. Compensation for the company's sales representatives will be commission based, with a small salary. The salary is necessary to ensure that the sales people are willing to work for a new firm -- a guaranteed salary can entice them from their current positions. The commission element, however, will likely comprise most of the compensation for the sales people. We want to entice them to pursue the biggest contractors and clients possible so that we can build market share and production capacity as quickly as possible. Commission sales acts as an incentive for the sales reps to seek out the largest customers, as they will provide the best return on investment for the salespersons' effort.

3. There will only be one distribution channel initially. This… [END OF PREVIEW] . . . READ MORE

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"Distribution Strategy."  Essaytown.com.  October 24, 2011.  Accessed January 22, 2021.
https://www.essaytown.com/subjects/paper/distribution-strategy/4827910.