What is a Distribution Channel Management in E-commerce?
Distribution channel management in e-commerce is the process of strategically managing the different channels of distribution for online products and services. It includes determining the most effective and efficient ways to get the product to the consumer, whether it’s through online stores, physical stores, or a combination of both.
Distribution channel management also involves understanding the customer’s buying habits and preferences and tailoring the distribution channels to meet them.
Significance of Distribution Channel Management in E-commerce Logistics
Distribution channel management is essential to e-commerce logistics. It helps ensure that the goods and services are delivered to the customers timely and cost-effectively. It also helps to create an efficient supply chain network that supports the e-commerce business.
- Distribution channels help reduce transportation, storage, and delivery costs.
- They also help to reduce lead times and ensure that the customers receive their orders on time.
- Distribution channel management also helps to ensure that the customer’s needs are met and that the quality of service is maintained.
Prerequisites to Calculate Distribution Channel Management and How It Works
The main elements of effective distribution channel management include –
- Knowledge of marketing principles
- Understanding the different types of distribution channels
- Data analysis skills
- Strategic management skills involving the target audience, different types of distribution channels, market demand, etc.
- Communication skills to communicate effectively with stakeholders, such as customers, suppliers, and retailers. It also involves being able to explain the different types of distribution channels, the strategy, and the objectives to all stakeholders.
Use Case With Distribution Channel Management
Let us assume a manufacturer of smartphones that wants to market its products. The corporation can use several distribution channels to guarantee that its phones are sold to various clients and geographies. As part of its distribution channel management strategy, the company must form associations with intermediaries like wholesalers, distributors, retailers, etc.
