Now I will guide you through the concept of Distribution channels for your business model canvas.
Distribution channels help us move our products from an idea to the customer. They are the ways how you reach out to your target customers.
These channels could be physical channels, such as a store needed to sell clothes or a local market, or they could be virtual channels, such as an e-commerce website selling clothing online. If you would like to grow your business you would also need to negotiate deals/partnerships with the distribution channels, such as supermarket chains.
You can also use a mix of both physical and virtual channels. Most modern companies do that today. For example, you can have a physical store in the city center, and then a website to sell your clothes online to ship clothes directly to your customers. Having both will help you reach customers beyond your immediate community.
Take away: Now think about how you could best reach out to your customers. Write it down in the canvas.
Before you go ahead and finalize it, I would like to share with you how I went about identifying my Distribution Channels.
Esther’s Distribution Channels
Having decided to focus my business on selling fresh pumpkin products to working parents with limited time and money, I now needed to figure out how to reach potential customers and how to deliver my products to them. This was an important phase for the success of my business and to enable it to grow.
I realized that sitting at home and waiting for customers to buy is not really the best way to grow or scale my business. So, I first went to the local market to get to know my customers better. I had in mind that once I knew them, I would open my own small store close by. While doing so, I also started to save a little money every day to be able to afford the store rent.
During this initial period of my business, I slowly started to develop a loyal customer base of people whom I got to know at the local market. This helped me prepare for the store opening day. On that day, I was planning to have a solid number of customers who were going to buy my products. This would not only help me pay the store rent but also help me grow the business.
One year into having the store, I decided to expand the number of customers by setting up a website. This allowed me to sell the products online to people outside of my own town as well as those living in other parts of the town who do not yet know my business. Having a website also builds trust in your business.
I connected with a young woman student on Empower Women whom I hired to help me create the website. She also helped me to set up a Facebook Business Page to drive traffic to my website.
What I realized was that there were customers all over the world interested in my products. I was amazed about the positive response. My sales have more than doubled since then.
What was important in this phase of my business expansion was how I would deliver the products to my customers. I did not have my own vehicle but knew people who had small trucks. I made a deal with one of them and paid them from my sales each time they delivered my products.
Take away: Talk to your customers, explore and strategize about possible Distribution Channels for your business. What would be the best way to start? You could have a short term goal and a longer term goal in mind.
When you talk with your customer, what do they say? What is their preferred channel? Get back to your piece of paper where you wrote down your ideas. Are they still the same? What has changed? Do you need to get back out and consult further?