A distribution strategy explains how an offer reaches a customer and who performs the selling, delivery, support and payment work along the way. The right route depends on the customer, the offer and the economics. It is not simply a choice between “online” and “retail,” and greater reach does not automatically produce profitable sales.
Start with the decision: which route can serve suitable customers reliably while protecting enough margin, control and capacity?
Map the route to the customer
Write every step between the business and the end customer. For a product this may include a marketplace, wholesaler, distributor, retailer, fulfilment provider and returns process. For a service it may include direct sales, a referral partner, an agency, a reseller or a subcontracted delivery relationship.
For each participant, record what they own, what they charge, which customer data they can access, who sets the price and who is responsible when something goes wrong. This exposes hidden dependencies that a simple channel label misses.
Compare five practical trade-offs
Customer reach
How many suitable buyers can the route realistically reach, and how strong is the intermediary’s relationship with them? Audience size is not enough; check fit, purchase behaviour and geographic coverage.
Control and customer learning
Direct routes can provide closer customer contact, while intermediaries may control the relationship, presentation or pricing. Decide which feedback and customer information the business genuinely needs, and handle personal information lawfully.
Cost to serve and margin
Include commissions, discounts, listing or platform fees, shipping, returns, support, bad debt, partner management and internal time. Compare contribution margin rather than revenue alone.
Capability and capacity
A partner may add relationships, local knowledge, logistics or support. It can also create training, quality-control and dependency work. Check whether the business can fulfil the demand it is trying to create.
Risk and reversibility
Review exclusivity, territory, minimum volume, service standards, intellectual property, termination and customer ownership before signing. Use qualified legal, tax, customs or regulatory advice where required.
Direct and indirect are not automatically better or worse
Direct selling may offer closer contact and more control but require the business to fund acquisition, fulfilment and support. An agent, distributor, reseller or marketplace may accelerate access while reducing margin or control. A hybrid model can work when the routes have clear customer boundaries and do not create unresolved channel conflict.
For companies considering export, Canada’s Trade Commissioner Service market-entry guide distinguishes direct exports, indirect exports, partnerships and investment, and recommends due diligence on prospective agents and distributors. Its export guidance should be adapted to the specific market and does not replace professional advice.
Run a limited channel test
Suppose a Vancouver specialty-food producer currently sells directly at local events and is considering an independent retailer. This is a hypothetical example, not a client result.
The owner could compare eight weeks of direct and retail activity using units sold, net contribution after all fees and labour, returns, repeat orders, fulfilment problems and useful customer feedback. A short, non-exclusive trial with agreed stock, payment, display and review terms would produce better evidence than assuming the retailer’s foot traffic will translate into profitable demand.
Set the decision rule in advance: expand, adjust, continue the test or stop. Do not judge the route from gross sales alone.
Frequently asked questions
What are common distribution routes?
Common routes include direct sales, agents or representatives, distributors or wholesalers, retailers, marketplaces, resellers and partnerships. They are options, not a universal four-channel taxonomy.
Does using a distributor guarantee wider profitable reach?
No. A distributor may provide access and support, but the result depends on customer fit, incentives, margin, capability, terms and execution.
Can a service business have a distribution strategy?
Yes. Referral, agency, licensing, reseller and subcontracting relationships can influence how a service is sold and delivered. Scope, quality, confidentiality and responsibility must be explicit.
Choose the next channel deliberately
Our Vancouver business coaching work can help compare the evidence, economics and trade-offs. You can also apply for two weeks of free coaching or book a 15-minute fit call. Applications are reviewed manually; acceptance and particular outcomes are not guaranteed.
