1. Introduction: What is distribution? Where does the value of the distribution system come from?
There are at least two stakeholders involved in the distribution system: the brand side and the distributor side.
From the traditional agency model to the rise of social networks, individual users can also promote products as a distribution channel, and distribution itself has long been integrated into our lives.
With the rise of social networks, everyone has their own social circle. Economic pressure has prompted most people to make some quick money through side jobs. Due to the factors of energy and ability, some people choose to use their personal circle to introduce friends to buy goods to earn commissions.
The reasons why brands are keen to develop distribution channels:
1. Reduce costs
With the bottoming out of Internet dividends in recent years, the cost of acquiring customers has continued to rise. I remember the education industry advertising report for the second half of 2020, which was studied some time ago. With the rise of social e-commerce, distribution can use the fan (acquaintance) relationship chain of social platforms to complete customer acquisition at a very low cost. Moreover, the acquaintance economy itself can reduce the psychological defense line of purchasing users.
2. Increase product sales
The purpose of the distribution model is to increase high-quality sales channels. If users are willing to become your KOC, you can help you reach more users, sell more products, and increase sales and revenue. Why not?
2. Briefly describe the distribution system
As an Internet person, "distribution model" is nothing but a familiar word. Establishing effective sales channels is the core of distribution. The product is sold to the seller through a certain channel, that is, the product must be reached through a certain distribution method.
Let's take a look at the role and role of distribution channels in the entire sales chain:
Sales role: After the channel purchases products from the product side through wholesale procurement, it sells to consumers through its own links;
Recommended role: With the rise of social e-commerce/private domain traffic, channel parties with traffic promote products to consumers for purchase and get commissions.
Regardless of the role, in simple terms: distribution = paying someone to sell things for you.
This model is also widely used in the current e-commerce environment. For example, Taobao, JD.com, Pinduoduo and other large and small platforms are equipped with distribution mechanisms. Compared with the traditional offline distribution forms of [wholesale and retail] and [multi-level distribution], the new online distribution model does not have such high value requirements for channels, and can achieve universal assistance: promotion collection/channel commission.
Online channel distribution is roughly divided into the following two ways.
1) Promotion and collection process: some authorized stores such as Taobao and JD.com
The buyer creates a distribution purchase order with the distributor;
After the distributor receives the distribution purchase order, it creates a promotion purchase order to the supplier;
After the order is confirmed, the supplier will ship it directly to the buyer;
After the buyer receives the goods, the telemarketing list distributor pays the distribution purchase order to the distributor, and the distributor exercises the right of collection at this time;
After the distributor receives the payment, it will pay the supplier the amount of the promotional purchase order;
After the supplier receives the payment, it pays the commission to the distributor.
2) Channel commission process: Taobaoke, Pinduoduo distribution
The distributor obtains the exclusive product link provided by the supplier;
The distributor promotes the product link to the buyer, and the buyer creates a buyer list through the link;
After the order is confirmed, the supplier will ship it directly to the buyer;
After the buyer receives the goods, that is, after the supplier receives the payment, the commission will be automatically paid to the distributor's account.
From the above two settlement methods, we can see that the forms of distribution channels are different, so if the distribution channels are managed purely by a unified system and structure, it can only play a one-sided role in certain circumstances.
As business stages change and the business environment changes, the distribution system also needs to be adjusted accordingly in order to correct channel behavior and meet strategic needs.
Distribution itself is to sell products through channels, and each link of channel sales represents its own brand and market image. Therefore, in the design of the corresponding distribution system, each link should be carefully considered, and the deep demands behind it should be considered. No matter how the distribution system is adjusted, its ultimate goal is to meet the demands of corporate