What is a distribution system

The distribution system refers to an enterprise organically connecting suppliers and dealers through the Internet, providing a brand new model for the enterprise's business operations and cooperation with trading partners. The distribution system can help users distribute and attract investment on a large scale, efficiently manage downstream distributors, and build users' online distribution channels. With the help of many automated functions and technologies, it can greatly save users' manpower and time, and easily create a company's unique network distribution. The platform allows more people to help users sell goods and achieve rapid business growth.

The operating environment of this tutorial: Windows 7 system, Dell G3 computer.

The distribution system refers to the organic connection of suppliers and dealers by enterprises through the Internet, providing a new model for the enterprise's business operations and cooperation with trading partners. Suppliers, branches and dealers can submit business documents, query product supply and inventory status, and obtain market and sales information and customer support in real time, realizing end-to-end communication between suppliers, branches and dealers. Supply chain management effectively shortens the supply and marketing chain.

Six elements of distribution system

In distribution management, distribution system is a very important concept, which includes six elements, That is, cost, capital, control, market coverage, character and continuity. In English, these six factors all begin with the letter "C", so some people call it the "Six Cs of Channels." Analysis of these six "C's" is the foundation of a distribution system.

Cost

The first thing to consider when formulating a distribution strategy is cost. The cost of a distribution system consists of two parts. One is the development cost, including investment in fixed equipment and research expenses. The second is maintenance costs, including equipment rental, vehicle fuel consumption, personnel wages and other variable costs. Some systems have low development costs but high maintenance costs, while others, on the contrary, require huge investments in the early stages of development but have very low maintenance costs in the later stages. Enterprises should weigh these two costs from a long-term development perspective when choosing a distribution system.

Capital

Companies must consider different ways of funding requirements and cash flow when choosing a distribution system. For example: if you are establishing your own distribution system, it generally requires a large amount of capital investment; distributing products through intermediaries usually does not require the company to invest cash. Agents generally do not require companies to carry out cash flow before selling goods, but they often require subsidies in the initial stage.

Control

Control "refers to the company's ability to control distribution channels. If the company's control ability is strong, it can better manage sales personnel, Understand the changes in market demand, so as to sell their products and services in a more effective way.

Although the investment is relatively large for a company to set up its own distribution system, it can ensure the company's control over the distribution channel. The longer the distribution channel , the company's price and sales depend on the company's resources and management capabilities.

Market coverage

The three-level goal of market coverage: achieve target sales; Market share; achieve satisfactory market penetration. Sometimes due to various reasons, companies cannot achieve the above three goals at the same time, but always focus on one and lose the other. At this time, the company needs to prioritize these three goals and clarify which one is most beneficial to the company's long-term development. Important core goals. For example, due to limited channels and funds, some companies are not required to take into account all markets in the actual marketing process, but to strengthen market penetration in densely populated areas.

Features

The characteristics mentioned here include company characteristics and target market characteristics. The former is mainly the nature of the product, such as physical properties, technical content, etc., and also includes other company-related content other than the product, such as The company's size, reputation and financial status, etc. These properties determine what channels are suitable for the company to use for sales. For example, insurance products require short channel sales, while standardized products can be sold through long channels. For another example, high-end cosmetics are suitable for sales in a shopping environment Sold in elegant department stores or cosmetics stores.

Target market characteristics include customer characteristics, intermediary characteristics and competitor characteristics. If the customer's purchase quantity is small and the purchase frequency is low, the company should use longer distribution channels . Factors such as whether middlemen bear storage and transportation costs and advertising costs should also be taken into consideration. In addition, the company should also determine its own channel strategy based on the situation of competitors.

Continuity

In fact, what needs to be considered here is the lifespan of the distribution channel, that is, which distribution methods are chosen to ensure the smoothness and stability of the sales channel. In order to avoid interruption of distribution channels, the company must establish an excellent brand to prevent middlemen from switching to other companies.

Necessity of distribution management informatization:

1. Competition is fierce, small and medium-sized clothing, shoes and hats and other trendy enterprises have low profit margins and no cost advantage;

2. There is no good coordination between various links and departments, and the overall management integration of the enterprise is low;

3. Know the importance of data, but there is no way to collect it, let alone analyze it, resulting in blindness in market decision-making;

4. Have great concerns about the investment cost and maintenance cost of the information management system , wavering;

5. The opaqueness of inventory, terminal sales, logistics, etc. causes losses.

The distribution system can help users distribute and attract investment on a large scale, efficiently manage downstream distributors, and build your online distribution channels. With the help of many automated functions and technologies, it can greatly save users' manpower and time, and easily create The company's unique network distribution platform allows more people to help you sell goods and achieve rapid business growth.

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