Manufacturers and businesses seeking wider market reach often engage external entities to handle product distribution. This involves agreements with independent businesses to store, transport, and sell products to retailers or directly to end consumers. For example, a craft brewery might partner with a regional beverage distributor to get its products into local stores and restaurants. This approach contrasts with direct-to-consumer models or in-house sales forces.
Expanding market penetration is a primary driver for establishing distribution networks. Leveraging existing infrastructure and expertise of established distributors provides access to wider customer bases, leading to increased sales volume and revenue potential. Historically, distribution networks have played a vital role in connecting producers with geographically dispersed markets, even before the advent of modern logistics technologies. Building such networks enables businesses to focus on core competencies like product development and production, leaving the complexities of sales, warehousing, and transportation to specialized partners.
