Distribution channels have been with us for a long time. The Boston Tea Party of 1773 occurred when the British Empire tax on tea was reduced to compete with lower prices of Dutch tea. There is more to this story but it illustrates how distribution channels have been with us forever as a vehicle to move product from producer to consumer.
As a young locksmith I quickly learned about business channels of that era. There were two main channels available to locksmiths. The first channel consisted of wholesale locksmith distributors who stocked 95 percent of the products a locksmith uses. The second channel consisted of builders hardware distributors. Items with special finishes or unusual designs could be purchased from builders hardware distributors. Between locksmith distributors and builders hardware distributors, a locksmith became the final connection between security distributors and consumers.
What has happened in recent years can be called a channel mix. The simple business structure of producer to wholesaler to dealer is still in use but direct marketing has now been added. Just like competition in 1773, producers are seeking ways to increase sales and profits. The internet has provided a new sub-channel called E-commerce. The internet allows manufacturers to sell directly to consumers, which eliminates intermediary costs. Add to this the emergence of big box stores where producers may offer larger discounts due to a higher volume of sales.
A final process for success in any business channel is Promotion. The problem for consumers who make purchases through E-commerce or at big box stores is installation. Consumers must be informed that new goods or services are also available from their local locksmith dealer and we can finish the job.
