Chris Bradley, class of ’78 gave a very informative lecture on how to choose a distribution channel for your business. Mr. Bradley is the President and CEO of Cuddledown, a manufacturer of premium down bedding, based in Portland, Maine.
What you need to know…
1. “It’s the merchandise, stupid.”
The product is the MOST important focus for a business and if a business does not have a good product, it will not succeed.
Mr. Bradley surprised us with a pop quiz: What no-tech new product was sold to hotels across the country during the Great Recession? (See the answer after the jump).
Answer: The curved shower rod.
Hotels across the nation swapped out their straight shower rods for curved rods because they give the customer a more spacious shower experience. Such a simple product and yet so incredibly compelling!
So before you even choose a channel, be sure your product is worth selling! It seems like a no-brainer, but it is very easy to forget.
Now for the meat of the presentation…
2. Choosing of the distribution channel
When choosing a distribution channel, you have many options. Mr. Bradley’s list consisted of:
- Retail stores
- Multi-channel retail
- Institutional (such as hotels, bed and breakfasts, offices)
- Pure play (meaning the company has no brick and mortar store; it conducts business solely through the Internet)
To choose the best channel(s) for your business, it is best to do SWOT (Strengths, Weakness, Opportunities, and Threats) analyses to see which one best suits the needs of your business. Below are just a few examples:
Multichannel SWOT: Weakness: success requires deep product selection. This means that in order to show your customers you are a credible business, you must invest in a huge variety of products to show the customers that you are seriously in the business and can hold your ground.
Retail Pure Play SWOT: Weakness: Hard to drive traffic/ hard to see “billboards in the basement.” The World Wide Web is a huge place and a business that only communicates to the outside world with a website will have low visibility. A business has to invest in advertisements, Google search placements, and so on to get customers to come to their site– an even that might not be enough!
Viral Marketing: The Holy Grail of all businesses. If you can get people to get their friend to go to your business– that is free advertising. Referred friends are also more likely to make purchases that those without the recommendation.
3. Financing Your Business
- Angel Investors
- Venture Capitalists
- Conventional lender
- Asset-based lender
- CBDC (Community Business Development Corporations)– a free resource! They will critique your business plan, help you get started, etc– but remember you get what you pay for, so don’t feel obligated to follow their advice if it goes against your passions and gut feeling.
- State agencies
- SBA (Small Business Administration)
And remember, you don’t have to stay within your industry for help! To get your ideas flowing, try talking with people from other industries and attending conferences outside of just your industry’s, and see how they are solving their problems and maybe you’ll learn something new!
If you have any questions, Chris Bradley kindly gave us his email: email@example.com. Thank you so much to Christ for such a wonderful and informative workshop!