Distribution
"Nothing is sold until the end user has gotten the product."
Eliyahu M. Goldratt, TOC Originator
Once your products have been produced, you have to make sure your customers get them safely and on time.
Usually, companies that specialize in creating the products do not have distribution resources. Nevertheless, as the producer you are not exempt from addressing distribution of your product.
In this post, the last in the series of six, we will review several distribution aspects you need to consider in your product design and production.
Endurance under environmental conditions
Usually, environmental conditions during transportation are harsher than in usage. Whichever is the case your product should be designed to tolerate both.
During shipment, the products may be exposed to temperatures of -30°C (or less) on a runway in a northern country during winter to 60-70°C in a closed container on a dock in mid-summer day.
It may be exposed to vibration, drops, and high humidity, along the way as well as during usage.
If the product does not require a controlled temperature (as needed for foods and drugs), you have to make sure it can tolerate extreme temperatures unscathed.
During shipping and handling, the product may also experience prolonged vibration during transportation on trucks or shocks while dropped by a careless forklift driver or crane operator. Both the product and its packaging should be designed so that the product will arrive intact at the end customer.
Packaging
In addition to protecting the product, packaging is highly important for the sales process. Packaging of products sold in real stores should be attractive and pleasing to the eye. In addition to that, if the products will be sold in large chain stores the chain management will probably dictate a variety of product packaging requirements, such as dimensions, maximum and minimum amount of products in carton packaging, maximum weight, marking and identification.
On the other hand, product sold in virtual stores should not have fancy packaging. However, the packaging should be more robust since typically, products are sent individually and may experience more extreme environmental conditions.
Hazardous Materials
The transportation of dangerous substances are subject to strict regulation at surface, sea and particularly in the air. We tend to think that hazardous materials are toxic and highly aggressive substances. However, did you know that standard rechargeable batteries are considered hazardous material, and therefore, require special permits to ship them? Thus, if you are designing a low voltage consumer electronic device you should consider whether to use rechargeable batteries, disposable batteries or external power supply.
There are many other issues in distribution, such as point of ownership transferring, inventory management, payment terms, and more.
Service and Maintenance
Unless for single usage your customers my need service or maintenance activities. Often, the practice for international marketer is to contract local service provider for long term relationships. This service may, or may not, carry your product or company brand name, subject to your company policy.
Another option is to establish a local company for marketing and servicing your products and customers.
In either one of these options you will be required to provide the local company your know-how training, procedures and special equipment, as needed.
Conclusion
You should consider distribution starting with the definition of the product and following through the materials and production technologies selection, product design, manufacturing and packaging. You want to avoid decisions, or lack of consideration that may result in unplanned costs, breaks, shipping delays and worst of all, damages to your reputation.
This and the earlier five posts provide a brief overview of the five major steps involved in transferring products from prototype to the commercial phase. Each of these five steps encompasses a wide range of disciplines and specialties. Proper management of this process will ensure that your product will suit its purposes, will be profitable and will be delivered safely to your customers.
