The first step in determining a distribution and sales strategy is to sort through the choices. For example, imagine you are starting a business that sells hardware products to consumers. You could opt to field a sales force that approaches retail chains like Home Depot and Lowe’s to persuade them to carry your products. You could sell directly to consumers without the need for salespeople, through catalog or Internet sales. Another option is to sell through an intermediary, such as a distributor, wholesaler, or manufacturer’s representative. If you decided to go this route, your intermediary would call on Home Depot and Lowe’s on your behalf. Intermediaries are sometimes difficult to find and attract. It’s not uncommon for a firm to have to “prove” that its product will sell, by selling it itself, before a high-quality distributor or wholesaler will sign on.

The first step in determining a distribution and sales strategy is to sort through the choices.

Similar choices apply for some service businesses. Hotels, for example, sell their services (typically rooms) directly through their Web sites and telephone reservation services and through intermediaries, such as travel agents, tour operators, and airlines. For example, if you were planning a trip to Walt Disney World in Orlando, Florida, you could book your flight, rental car, and hotel through Orbitz, Expedia, or many similar services. In these cases, Orbitz and the others are acting as intermediaries for the service providers.

The key to making the right choices among these alternatives is to think carefully first about where people in your target market shop, and then about the most effective and economical way to get your products some shelf space in those outlets. You also need to think about the operational ramifications of your choices. Although it might sound good to get your product placed in Wal-Mart or Costco from the outset, few new businesses are prepared to ramp up production fast enough or offer the huge volume of product needed to satisfy these types of retailers. In addition, you need to carefully weigh the choice of retail outlets and other resellers with your brand and the image you want to convey to your target market. Coach, for example, is a billion-dollar company that sells stylish handbags, footwear, and accessories. It’s built its business by selling through specialty stores rather than mass merchandisers. Specialty stores are more consistent with Coach’s upscale image than mass merchandisers; they appeal to consumers who prioritize quality and brand image over price.

If you decide to employ your own sales force, you’ll need to decide how many salespeople will be needed, how the numbers will be ramped up as the company grows, and how the salespeople will be compensated. These factors vary by industry, so you’ll probably need to talk to industry experts and study industry trade journals to make these calls.

If you decide to distribute your products through intermediaries, you’ll have to decide how the intermediaries will be chosen and the ways in which the intermediaries will interface with the sales outlets in your industry. In most cases, you’ll have to support your distributors and wholesalers with training, technical support, shipping, point-of-sale advertising material, and other forms of sales support.

An exciting element of distribution and sales strategy for new businesses is that you don’t always have to follow the conventional forms of distribution and sales. One way a business can innovate and provide unique value in the marketplace is through distribution and sales. For example, Dell revolutionized the computer industry by deciding to sell directly to consumers rather than through retail stores. Similarly, ProFlowers is making noise in the flower industry by changing the number of hands that flowers pass through before they are sold to consumers. Flowers are raised by growers and then typically pass through the hands of an importer (or distributor), wholesaler, and retailer before they are sold to the customer. This process typically takes between 7 and 12 days. As a flower passes through the process, temperature and humidity often change, which degrades the flower’s appearance and shortens its vase life. ProFlowers, which sells online, has sharply reduced the number of steps a flower must go through as it travels from the grower to the customer. When an order is placed via its Web site, ProFlowers routes the order to a grower that it has contracted with. The grower fills the order and ships it directly to the customer via UPS or FedEx utilizing proprietary technology provided by ProFlowers. The intermediaries are eliminated, saving ProFlowers money and allowing the customer to receive flowers that are fresher and last longer than flowers purchased through a traditional outlet.

An exciting element of distribution and sales strategy for new businesses is that you don’t always have to follow the conventional forms of distribution and sales.