B2B Distribution Channel

B2B
Distribution
Channel
Georgekutty P Tom
Ribin Joseph
Sajin Thomas
A business-to-business (B2B) distribution
channel involves a business purchasing goods
B2B Distribution from a supplier or manufacturer and then

selling them to retailers, wholesalers, or other
Channel manufacturers. B2B distribution differs from
selling directly to consumers.
TYPES OF
DISTRIBUTION
CHANNEL
1.Direct Sales-Involves your own sales force directly engaging with customers,
providing maximum control over the sales process and fostering personalized
relationships.
• Strengths:
1.Maximum Control
2.Stronger Relationships
• Considerations:
1.Resource-Intensive
2.Limited Reach
2.Distributors and Resellers-Utilizes independent intermediaries who purchase
products in bulk and sell to their network, offering a wider market reach and cost-
effectiveness.
• Strengths:
1.Wider Market Reach
2.Cost-Effective
• Considerations:
1.Shared Control
2.Variable Commitment
3. Online Marketplaces-B2B platforms connecting buyers and sellers, providing global
reach and cost-effectiveness, albeit with increased competition and limited control.
• Strengths:
1.Global Reach
2.Cost-Effective
• Considerations:
1.Increased Competition
2.Limited Control
4. Value-Added Resellers (VARs)-Specialized partners offering not just products but
additional services, enhancing the value proposition and leveraging industry expertise.
• Strengths:
1.Enhanced Value Proposition
2.Industry Expertise
• Considerations:
1.Increased Complexity
2.Profit Sharing
CHOICES OF
CHANNEL SYSTEM
1. Product Characteristics:
1. Complexity:
1.Direct Sales: For products requiring technical expertise or demonstrations.
2.Online Marketplaces/Distributors: Suitable for straightforward products with
basic training.
2. Value:
1.Exclusive Partnerships/Direct Sales: High-value items for controlled
distribution.
2.Multiple Channels: Lower-value goods for wider distribution.
2. Target Market:
1. Size and Location:
1.Online Marketplaces/Distributors: Geographically dispersed markets.
2.Direct Sales: Concentrated markets.
2. Buying Behavior:
1.Online Platforms/Direct Sales/Industry Distributors: Align with target
businesses' preferred purchasing methods.
3. Company Resources:
• Financial Resources:
1. Direct Sales/Exclusive Partnerships: Significant investment.
2. Online Marketplaces/Distributors: Budget-friendly options.
• Expertise:
1. Consider expertise in managing specific channels.
4. Competitive Landscape:
• Distribution Strategies:
1. Learn from Competitors: Analyze and differentiate.
2. Market Saturation: Explore alternative channels if saturation exists.
5. Desired Level of Control:
• Direct Sales:
1. Strengths: Pricing, branding, customer experience.
2. Considerations: Resource-intensive, limited reach.
• Indirect Channels (Distributors/Online Marketplaces):
1. Strengths: Wider reach.
2. Considerations: Shared control over pricing, branding, and customer experience.
CHANNEL
CONFLICT
1.Competition:
Issue: Direct sales vs. distributors/resellers leading to price wars and
resentment.
2.Territorial Disputes:
Issue: Exclusive rights conflict, disrupting established relationships.
3.Differing Objectives:
Issue: Misalignment in goals (maximizing sales volume vs. higher profit
margins).
4.Unclear Roles and Responsibilities:
Issue: Confusion on tasks like marketing, customer service, leading to
inefficiency.
DISTRIBUTION
LOGISTICS
1.Functions:
1. Warehousing and Storage: Secure storage for larger quantities.
2. Inventory Management: Optimizing stock levels, demand forecasting, and just-in-time
strategies.
3. Order Fulfillment: Accurate picking, packing, and shipping for larger quantities and
diverse customer needs.
4. Transportation: Cost-effective modes based on volume, distance, and specific
requirements.
5. Route Optimization: Efficient delivery routes for geographically dispersed markets.
2.Objectives:
1. On-Time and Within Budget Delivery: Maintain positive relationships and trust in the
B2B supply chain.
2. Minimize Errors and Damage: Implement quality control to enhance customer
satisfaction.
3. Maintain Flexibility and Responsiveness: Adapt to changing demands and disruptions.
4. Optimize Resource Utilization: Efficiently use warehouses, transportation, and
personnel.
3.Importance:
1. Customer Satisfaction: Timely deliveries, accurate orders, and efficient
communication.
2. Brand Reputation: Demonstrates reliability and efficiency in B2B distribution.
3. Cost Management: Optimizing logistics leads to significant cost savings.
4. Competitive Advantage: Provides faster delivery times, lower costs, and greater
flexibility.
Conclusion
Choosing the right ways to sell in B2B is super important.
There are different options like selling directly, using
distributors, or being on online marketplaces. Each has its
good parts and challenges. You need to think about your
product, who you want to sell to, and how much money you
have. Sometimes, it's best to use a mix of these ways.
Communication is really important to avoid problems. Also,
making sure your products get to customers smoothly by
managing things like storage and shipping is a big deal.
Basically, picking the right ways to sell and managing the
behind-the-scenes stuff well helps your business run smoothly
and do well.
THANK YOU

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