1 What are distribution channels?

Distribution channels are the ways that a product or service reaches the end user, from the producer or supplier to the retailer or consumer. Distribution channels can be direct, such as selling online or through a company-owned store, or indirect, such as using intermediaries like wholesalers, distributors, agents, or brokers. Distribution channels can also vary in terms of the number of levels, the degree of integration, the type of intermediaries, and the geographic scope.

2 Why are distribution channels important for market sizing?

Distribution channels are important for market sizing because they affect the size, structure, and dynamics of the market. Depending on the distribution channel, the market size can be larger or smaller, more fragmented or concentrated, more stable or volatile, and more competitive or profitable. For example, a direct distribution channel can increase the market size by eliminating intermediaries and reducing costs, but it can also increase the competition and the customer acquisition costs. An indirect distribution channel can reduce the market size by adding intermediaries and increasing costs, but it can also increase the customer loyalty and the market penetration.

3 How can you determine the best distribution channels for your market sizing?

To determine the best distribution channels for your market sizing, you need to consider several factors, such as the characteristics of your product or service, the characteristics of your target customers, the characteristics of your competitors, and the characteristics of your industry. Is your product or service standardized or customized? Is it perishable or durable? Who are your target customers? What are their needs and preferences? Who are your competitors and what are their strengths and weaknesses? What are the industry trends and drivers? By analyzing these factors, you can identify the distribution channels that best fit your product or service, target customers, competitors, and industry. Additionally, you should evaluate the trade-offs and risks of each distribution channel in terms of cost, control, coverage, and convenience.

5 How can you present your distribution channel findings?

Finally, you need to present your distribution channel findings in an engaging way. To do this, use charts and graphs to visualize data such as the market size and segmentation of each channel, or the comparison of different channels. Tables and matrices can be used to organize data such as the pros and cons, strengths and weaknesses, or opportunities and threats of each channel. Stories and scenarios are ideal for illustrating customer journeys, experiences, and value propositions of each channel, as well as potential outcomes and implications of different channels. By presenting your distribution channel findings in a clear, concise, and compelling way, you can communicate your market sizing and persuade your audience.