Distribution Mistakes Every Marketer Should Know and Avoid

In a world where everything comes easily, problems in delivery are not only costly in terms of logistics, but also in depressed sales.

The average computer user will only wait 2 seconds before leaving a web-page which loads too slowly. While we would wait longer than that for a product to be delivered, we can learn from the web that customers are incredibly impatient. Waiting for lines, products to be delivered, and even for calls not only cause customers to view businesses in a negative light, but also cause anxiety and anger.

When a customer waits too long, they start to wonder if they entered their address correctly, whether the product would be damaged, and whether there was any reason specific to themselves which caused the products to be delayed. These problems, while they are neither the fault of the company nor the customer, cause both harm.

In 2013, I had decided to launch my own online store selling computer equipment. After researching various possibilities, I settled on providing value to my customers through price-based leadership. I reasoned that by offering the same quality of product cheaper than any retailer could, customers would gain value and buy from me. I can then take home the margin of difference between my cost price and the retail price. This was the beginning of my drop-shipping business. The most costly mistake by far is my lack of research in delivery and fulfillment services. I sent the orders to my designated drop-shipper without prior testing of their delivery capabilities and timeframe. I assumed it would arrive within a few weeks. As I left the business to run, after a month I received multiple angry emails from customers. While some have received them very late, others did not receive them at all. In a panic, I contacted by drop-shipping supplier to enquire what went wrong. A few were sent back due to address errors, while others were lost. In the end, I quickly broke off my relationship with my current drop-shipper and physically went to electronic stores to buy products for the customers who had ordered from me and not received their items. I sent them myself and attached an apology. All in all, I would have spent around three times as much in handling all these problems compared to what I had earned in margins.

From the above example, lack of research and planning can be blamed for the costs I had to incur in running the business. Needless to say, I stopped the website within the week of this happening and was discouraged from any type of entrepreneurial activity for a while. Not only was I able to anger my customers, but I had also lost money from the experience. To improve on this in the future, I would definitely be planning and testing my distribution channel more exhaustively before launching a product.

To ensure that your customers are always kept happy, distribution is an important chain within marketing which must be addressed. How quickly, how well protected, and how costly distribution is directly affects consumer value.

In terms of how well protected, the type of delivery used could have an impact on a product’s value. For example, improper delivery methods could result in spoilage. Even if the company offers exchanges or refunds, this would inconvenience and annoy the customer. Having inconsistent delivery practices causes inconsistent product quality, which will show in consumer sentiment.

Apart from the quality and timeliness of delivery, the cost of the delivery also has an impact because it affects pricing. By having cheaper delivery options, your product has more room to price according to the market, and thus would better maximise value for consumers.

Not only that, but it can be seen that as a service, distribution involves service employees. If you have your own uniformed delivery staff, for example, their behaviours also have a direct effect on the company. A bad employee could reflect negatively on the brand, while a good one would increase value.

One good point regarding delivery is that delivery vehicles could also be used as moving billboards for promotional purposes. By exposing your brand at yet another advertising channel, you increase consumer familiarity and thus likability of your product.

To optimise the delivery process, consider the consumer when designing your supply chain. Opt for a delivery option which provides the most value- whether that be increasing care and handling for luxury goods or going for a cheaper option to reduce costs for durable goods. Consider how long your customers will be willing to wait for a product, and design the delivery service to match their expectations.

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