3 Keys for Preparing for Distribution

Guest Post by Maxine Manafy

Maxine Manafy is an entrepreneur, start-up founder and business development leader. Over her career, Maxine has served in leadership roles in the areas of business development, sales and operations. Most recently she was VP of Business Development at Quixey, a startup focused on mobile search. She was also VP of Search Global Partnerships at Yahoo, where she was responsible for growing Yahoo’s worldwide distribution, search market share and acquiring content. Maxine was the founder and CEO of Bunndle, an ad network for apps, where she built and launched a platform aimed at helping developers acquire new users. Prior to Bunndle, Maxine has also held business development and operations roles at Mochi Media, Viximo and Xobni driving distribution, user acquisition and growing revenue for these startups. In her former life, she was a manufacturing engineer at Intel and KLA-Tencor. Maxine has an MBA from the Stanford Graduate School of Business and a bachelor’s degree in Industrial and Systems Engineering from San Jose State University.

Distribution is typically described as the path or route by which customers get access to your products. It describes the movement of goods into the marketplace. We are familiar with products that are commonly distributed including software (i.e., games, business software, mobile applications, etc.), digital content (movies, music, electronic books, photos, etc.), and tangible goods such as toothpaste or clothing found in retail stores. Distribution often includes multiple steps or intermediaries in order to get the product to the customer. For example, perhaps there is a manufacturer, wholesaler and retailer that participates in the full flow of getting light bulbs to customers. Sometimes, there are fewer participants and the product is distributed directly to the customer say through a website or retail store. Apple, Microsoft, and Starbucks are examples of companies that do this well.

If you are looking to partner with other companies to help provide a bigger market for sales, business development can help. When getting ready to do distribution partnerships for your product, here are 3 key things to think about before inking the deal.

1. Look for companies that have an existing relationship with your customers. You may have to get creative about who the right partners are, typically their goals and your goals are aligned in the value of what you are trying to provide to the customer. For example, if you are trying to get users to download your new mobile app focused on fitness and exercise, you might want to find a way to partner with popular gyms, online fitness sites or content sources like an e-magazine focused on health. Beyond the value that you are providing to the customer, make sure that your partners find value in the relationship as well. Otherwise, there is no incentive for them to work with you. That might be in the form of co-promotion, financial incentives, a positive brand association or a number of other reasons they might choose to work with you. By setting up the right partnership model including business and financial terms, you ensure your success and a long-term relationship.

2. Make sure your product is ready to be distributed. All too frequently new companies want to go out and start signing up partnerships right away even though their product in its current form isn’t ready for distribution. This can easily tank your business. The product might be easily accessible from your site or your store, but if it can’t be shipped through a new channel without a lot of work involved, you are not ready to scale your business through distribution. You might need to consider building a new or unique version of the product specifically for the distribution channel. Or maybe putting a system in place to be able to handle the new capacity and volume needs to be set up in advance so that you don’t overwhelm your existing systems. Tracking and packaging are also important for both online and offline sales. If these things aren’t in place, it will be difficult to know if the channel is working well for you. It is important to do a full audit of your product and distribution systems to make sure that you are ready to go big with a new partner. Otherwise, all of your hard work in putting a deal together could go to waste.

3. Not all distribution channels are created equally. You will find that some drive a ton of new growth and others are duds. If you suspect there is a path to reach new customers that offers big growth for your business, try to test it, especially before getting into a long-term business arrangement. If there is no way to test it before working with a partner, perhaps you can structure a test agreement for a short period of time before making a long term commitment or gather data that can help you make an informed decision on whether or not to do the deal. If that’s not possible, be sure to minimize the costs and risks before getting into a long-term agreement. You will save yourself a headache and also build in the ability to do robust testing and optimization through the partnership. 

Whatever the path, whether direct or through multiple channels, distribution can serve as a powerful way to reach users and drive new growth for your business.

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