Getting your products in front of the right audience is crucial to building a customer base and finding success. If you’re trying to grow your company’s reach, you know how important it is to consider how you distribute your goods, including what distribution strategies and channels best serve your needs. Exclusive distribution is one of many potential strategies to consider.

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In this article, we’ll explain what exclusive distribution is, how it works, what kinds of businesses it can benefit and how software platforms can assist you in implementing an exclusive distribution strategy. Let’s get into it!

Article Roadmap

• What Is Exclusive Distribution?
• How Do I Carry Out an Exclusive Distribution Strategy?
• How Can Software Help With Exclusive Distribution?
• Next Steps

What Is Exclusive Distribution?

Exclusive distribution is an agreement between your company and a single authorized distributor, allowing them — and no other outlet — exclusive rights to carry and sell your product. For the right businesses, exclusive distribution can maximize both your reach and your revenue without sacrificing control over your product. Most companies partner with one or a few distributors.

Of the distribution strategies available to businesses, exclusive distribution involves the fewest intermediaries and gives your business the most direct oversight.

Exclusive distribution is most useful for businesses that sell expensive or luxury products, as well as businesses who have heavy brand-name recognition.

Apple products are a great example. They retail for high prices, are considered high-quality and are generally regarded as status symbols. This makes it possible for Apple to limit their distribution channels and still make a healthy profit. In fact, limiting where customers can buy their products can actually drive interest and revenue, by giving customers the impression of exclusivity and luxury.

Making effective use of this strategy means taking a few factors into account. If your company is primarily handling sales through your own storefronts, you’ll need dedicated staff to run the stores, both in-person and online. On the flip side, if you’re working with distribution partners, you’ll need to pay special attention to how they market you.

Not all products are the right fit for an exclusive distribution strategy. Products with lower costs and less brand recognition, like paper towels or chewing gum, sell best when they’re put in front of as wide of an audience as possible, since customers are less likely to specifically seek them out.

Exclusive Distribution Methods

Whether you’re setting up your own store or partnering with specialty retailers, there are a couple different ways to approach exclusive distribution. Let’s go over the ins and outs of each method to help you decide what works best for your business.

Selling Through Your Own Storefront

For some companies, the best way to engage in exclusive distribution is to open a store that only sells their own products. These storefronts can be physical locations in areas such as high-end shopping malls or retail complexes, or online storefronts through your company website.

In-person storefronts require more capital and maintenance to run, but for a company that can make them work, the results can be very worthwhile. To return to our earlier example, Apple runs dedicated stores that sell only their own products, giving customers a chance to try out laptops, tablets and phones before committing to a purchase, as well as offering in-person tech support.

If your business can’t open a physical store, online storefronts are much easier and more cost-effective to set up. If you already have a company website, it’s easy to use eCommerce technology to create a store page that engages with customers and distributes your goods. These website add-ons often automatically calculate taxes and shipping costs in order to expedite the process and keep everything aboveboard.

Many businesses are able to maximize their exclusive distribution reach by opening both in-person and online storefronts, though it requires more work and attention to detail to balance both channels. With the tremendous growth of eCommerce, however, having an online presence may be more important to selling high-yield goods than ever. Combining it with in-person stores can greatly increase your reach.

Partnering With Specialty Retailers

Despite what the name may imply, exclusive distribution doesn’t mean you have to completely throw out the idea of partnering with intermediaries — it just makes you more selective about the companies and markets you work with. Partnerships with specialty retailers can help you reach the audience you want without requiring you to spend the capital on your own storefronts.

For example, if you’ve ever been to a Best Buy location, you’ve probably noticed the large section dedicated to Apple products within the computer and laptop department. This allows customers shopping for Apple computers to find them in more locations than just the Apple Store, while also keeping the goods in an exclusive channel to accommodate their high price and high status.

There are several cases in which working with less specialized retailers would still benefit a company making high-priced luxury goods, but, for the most part, these products are best suited to storefronts with specifically targeted audiences. If opening your own storefront isn’t an option, or you have the resources to do both, you may want to look into partnering with some intermediary stores to improve your product’s reach.

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How Software Can Help

Now that you have a better understanding of how exclusive distribution works, let’s take a look at some of the benefits that come with using software to help handle your distribution needs. There are plenty of options available on the market, but it’s best to understand exactly what they can do for your business before you consider adding one into the mix.

Improved Communication

By automatically tracing the movement of your goods and products through the distribution process, you and your exclusive distribution partners won’t have to rely as much on other parties for updates on where shipments are located. This helps you keep your intermediaries informed without having to waste time searching for information, ensuring that no one is left in the dark at any step of the process.

Increased Efficiency

Distribution software can be set to handle the lowest-level tasks of the process without the need for human intervention, allowing you and your employees to focus on communicating with partners and facilitating deliveries. For exclusive distribution in particular, this means your stores can automatically request supply shipments before stock runs out.

Reduced Errors

Automation tools in distribution software are equipped to accurately handle most repetitive tasks, especially data entry and database management. Having the software handle these tasks reduces the possibility of human error, helping you provide more accurate information regarding your products and deliveries to customers and partners.

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Next Steps

Selecting the right channels and strategies for getting your products out into the market is crucial for the long term success of any business. Exclusive distribution is one method that can seriously benefit companies working in high-priced, luxury markets, or with high brand recognition.

Incorporating software can make this — and any — distribution strategy more efficient. If you’re ready for the next step, SelectHub has plenty of free resources to assist you in your software search, from our distribution software comparison report to our software requirements template.

So, what distribution strategy works for your business? Would exclusive distribution help or hinder your reach? Let us know in the comments below!