I feel like starting a retail business has never been easier — there’s a YouTube video and tool for everything. But growing one is exceedingly challenging. To survive in a competitive market, brands have to outshine their competitors and reach their customers where they are globally. This is a challenge, especially if you don’t have an optimized distribution strategy.

Today, consumers expect to interact with brands via multiple distribution channels. They want to buy in-store, via a company site, third-party platforms, and social media. This is what makes a comprehensive distribution strategy important. An optimized distribution strategy will help you figure out the right way to reach them.

In this article, I’ll guide you through how to do just that.

Table of Contents

• What is distribution strategy?
• Types of Distribution Strategies
• Selecting the Right Strategy
• Distribution Strategy Examples
• Tips for Creating an Effective Distribution Strategy

The principal aim of any retailer is to get their goods to the target market. Not only that, you must make them available in the manner they prefer to buy them, as seamlessly as possible, to keep customers engaged. This is a moving target.

Statistic: 77% of consumer product marketers have reported that they must significantly transform their brand’s customer engagement approach in 2025.

Your distribution strategy is how you reconcile all these necessities.

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Your strategy is your plan to speed the connection between your offerings and their end-users. That’s whether they’re consumers, businesses, or a mixture of the two. There are many considerations to account for when defining a distribution strategy.

The following are a handful of the most notable:

• The customer experience you aim to give and how distribution options align with it
• The nature of your products and how they must get sold and used
• Your direct competitors and how they serve customers
• Consumer needs and demands
• Shipping considerations

First, let’s look at one of the fundamental building blocks of an optimized distribution strategy — the distribution channels.

Distribution Channels

You might think distribution channels are self-explanatory. It’s the different places you sell your products, right? Wrong. That’s a common misconception. Your website, a third-party platform, or a physical store is not a distribution channel. However, each can form part of your distribution channel.

A distribution channel is a product’s entire journey to get from you to its end-user. It could be that your store or website is all that’s involved. That’s the case if you’re a direct-to-consumer (D2C) brand with a direct distribution strategy: You sell your lines straight to their end-users. Not all distribution channels are as straightforward, though.

Lots of channels, in fact, include intermediate steps between your firm and consumers — this is known as an indirect distribution strategy. The principal players in such more complex chains are as follows:

• Producers. These are the manufacturers who make products or their constituent parts.
• Wholesalers. Your budget and the costs associated with different distribution channels. Firms specializing in broad distribution of products to multiple retailers.
• Retailers. Businesses that sell products to their end-users. Sales can happen online or offline.
• Consumers/End-Users. The final purchasers of an item. They’re buying it to use, not to sell on.

Your business can exist at different points of these channels. If you sell many different products, too, each may have its own channel. You may also use more than one, or even more than one type, even if you only provide one product line. That’s where four principal varieties of distribution strategy enter the picture.

Types of Distribution Strategy

An optimized sales distribution strategy is one tailored to your brand and customers. You don’t have to choose from a limited number of prescribed alternatives. There are, however, four categories into which most strategies fall: intensive, selective, exclusive, and direct-to-consumer.

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1. Intensive Distribution Strategy

Many brands adopt this type of distribution strategy. Intensive distribution involves implementing as many different channels as possible for a given product. It’s a common strategy for consumer packaged goods (CPG) companies, perishables, and personal care products (to name a few).

• Pros: Enhances market penetration for the product. Widest consumer base. Powerful to increase brand awareness.
• Cons: Not always cost-effective. Pricing may vary, with retail stores trying to undercut each other.

Some easy examples of this are Coca-Cola and Snickers bars — these items can be bought practically anywhere, from Amazon to Walmart to vending machines (kids even sell Snickers bars door-to-door as a part of school fundraisers).

No business starts with an intensive distribution strategy. “You evolve to that the bigger you get,” shared Dave Gulas, cofounder of EZDC. Gulas helps ecommerce brands scale, and he shared his insights (including what he considers to be the “holy grail” of distribution — which I’ll get to in a minute).

2. Selective Distribution Strategy

This strategy is when firms choose different channels for specific products or services. They might, for instance, only sell an item in a particular geographic area. Or they may restrict sales of product lines to only their website. The idea here is to match channels to consumer behavior and demand. That, thus, is more cost and time-efficient for the brand.

• Pros: You can target consumers with more precision. More control over price, market, etc.
• Cons: More reliant on the distributor’s relationship with your target audience.

Here’s an example from the natural deodorant company Nuud. They nudge customers to purchase directly from their website (where they have the highest profit margins and most control over customer experience), but also have selective distribution partners:

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3. Exclusive Distribution Strategy

Companies may restrict the provision of some items even more. They could, for instance, use only one very narrow channel for a particular line. When brands use this tactic, they’re trying to stoke scarcity and thus demand. It’s how companies make products seem higher-end and more desirable. Or, a company could choose to only sell its entire product base directly to customers on its website.

• Pros: Exclusivity can create buzz for special launches. Explores symbiotic partnerships.
• Cons: High reward means high risk. Some willing buyers will be unable to access.

Here’s an example of a 2025 launch by Blogilates and Target. Exclusivity was a prime marketing characteristic, as you can see with the tagline “new and only at Target.” This launch went viral, no doubt in part to the founder’s massive audience established online and the perfect alignment between customers and retail venue.

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Tip: These aren’t siloed approaches to distribution. A company can simultaneously leverage both an intensive and exclusive distribution strategy by releasing limited-edition products in specific locations.

4. Direct Distribution Strategy

For many brands, it’s advantageous to have a direct distribution strategy for as long as possible. Dave Gulas even described it as the holy grail: “The holy grail of distribution is not needing these middlemen, these distribution channels.” And while direct distribution strategies are by no means new, Gulas said that “the direct-to-consumer aspect of it has gone on steroids,” citing the evolution of social media.

While this might look similar to an exclusive distribution strategy, it’s different in many important ways. Namely, a larger operational burden, higher profit margins, and the founder can be the face of the company. This brings a powerful level of authenticity to the entire sales process. The cliché “people buy from people” comes to life with this strategy (when leveraged properly — more on this in a minute).

• Pros: Complete control. Lowest costs. Most adaptable.
• Cons: Requires inbound customers. All awareness is generated by you. Largest operational burden.

Here’s an example of the clothing brand See The Way I See, which went on Shark Tank in 2023, touting huge sales through social media. The investors on the show passed on founder Sophie Nistico’s pitch because they all agreed that her business model was thriving and didn’t need their help.

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Selecting the Right Strategy

Defining the right distribution strategy for your product is more complicated than choosing from those four options, of course. You should stay focused on your customers while also considering your commercial goals.

I recommend you weigh the following considerations when creating an effective distribution strategy for your product.

Internal Considerations

Assess your internal infrastructure and how much control you want over distribution.

• Business operations. Could the right tech provide a smooth, direct distribution plan? Is your logistics good enough to reliably supply a retailer on the other side of the world? Start by focusing on what your team can realistically sustain.
• Post-purchase support. How much post-purchase support might end-users need? Would third-party retailers or providers be able to offer it? How much control do you want over the customer experience?
• Different channels for different products. Do you need to explore different channels for particular products? Or in other geographical areas or territories? Could dual distribution offer the flexibility your business needs?

Tip: This isn’t a one-time task, but rather an ongoing review of sales data. Loris Petro, marketing manager at Kratom Earth, shared this advice: “Choosing a distribution strategy that works for you means stripping away what looks good in a pitch deck and focusing on how people live, shop, and think in each location. Nothing beats observing that up close and adjusting as you go.”

This is backed by research: 76% of consumer product marketers report that they must adapt to changes faster than ever before.

Market Considerations

Assessing your marketing channels, customer data, and product awareness will help you gauge market considerations.

• Target audience. Customer preferences should be heavily weighed. Where is your customer base shopping? What’s most convenient for them?
• Awareness. Are potential customers already aware of your product, or do they need to be introduced? Direct sales can offer better margins and more control, but are you equipped to reach customers without retail partners?
• Marketing channels. How does content marketing impact or align with different distribution channels? Which ad types (online or off) best support your broader strategy?

Example: Hone John Tito, cofounder of Game Host Bros, shared the following experience of how he adapted his strategy to cater to different target markets. “When we launched our North American game server hosting, we focused on direct sales and online advertising. But when we expanded into Europe and Asia, we quickly discovered we had to have local partners who were better positioned to handle those markets than we could from across the ocean. We had to adapt our strategy based on the demands of each region, and the key metric that we watched closely was the customer acquisition cost (CAC). It dropped 20% once we made the switch to a partner model in Europe.”

Product Considerations

Assess how your product impacts distribution, planning for long-term efficiency (though this will evolve as your product and the market change).

• Routine purchases. If customers purchase your products routinely, middleman costs will add up substantially. Earning customer loyalty is a big upfront cost, but a relationship where customers purchase directly from your website instead of Amazon or big box retailers offers huge cost savings over time.
• Customer demand. Is there enough demand from the general public to support an intensive distribution strategy?
• Brand identity. Does it fit your brand’s positioning to have your products in every store under the sun? If you have a higher-end reputation, should availability be more limited? Also, consider if your customers purchase from you for value-based reasons.

Example: Selling on Amazon is an effective way to reach consumers who are searching for your products. However, many conscious consumers boycott Amazon. Choosing to sell through Amazon could conflict with your brand’s identity and your target market’s motives to purchase from you.

Distribution Strategy Examples

With all of that information in mind, let’s see how these distribution strategies look out in the wild.

1. Dawn Dish Soap: Intensive Distribution Strategy

Household cleaning companies aim to position their product everywhere, meaning both direct and indirect channels. Customers can buy their favorite dish soap online from wholesalers or curbside pickup at their favorite retail locations (distributors).

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By using the intensive strategy, this dish soap is available at:

• Ecommerce websites
• Convenience stores
• Grocery stores

2. Jeni’s Ice Cream: Selective Distribution Strategy

Ice cream is typically seen as another product sold using the intensive distribution strategy. Still, for smaller brands that aren’t sold in big box stores, Jeni’s Ice Cream has the opportunity to offer exclusive flavors and products depending on the location of its ice cream parlors, and now even through shipping.

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For particular states or shop locations, Jeni’s also offers exclusive merch like pint koozies, seasonal flavors, or limited edition flavors that are only available in controlled ways and periods.

3. Local Pet-Sitting Service: Exclusive Distribution Strategy

Even more niche of a service offering is the example of a small business running a pet-sitting service that only encompasses a particular zip code or clientele. This business may only be advertised through word-of-mouth, flyers shared around a small town, or the local community Facebook group.

This strategy also works for a business like a pet sitter because pet owners may trust a single individual more than a chain pet hotel. The customers’ pets may get more attention and better care, displaying the value in exclusivity as owners will have more trust and build a closer relationship with the service provider over chains offering the same service.

Why an Optimized Distribution Strategy is Essential

I’ve found the most successful companies are those that create a genuine connection with consumers. You can’t do that with a scatter-shot approach to distribution. You must tailor your strategy to those you wish to serve. That way, you ensure your target market gets the desired customer experience.

To deliver that experience, both customer satisfaction and loyalty will follow. Loyal customers are like gold dust for businesses. They spend more, and it costs less to keep them on board than to attract new ones. That’s why optimized distribution is essential.

On top of that, more of your customers will also become brand advocates. They’ll sing your praises to friends, relatives, colleagues, and more. You got them the products they wanted, when and how they wanted them, after all.

An optimized distribution strategy, then, can aid both customer retention and acquisition. Thus, winning you more sales in two distinct ways. How, though, can you create that kind of strategy?

Tips for Creating an Effective Distribution Strategy

1. Select the correct channels.

An integral part of your distribution strategy is your choice of channels. You must decide on the most efficient way of delivering products to your audience. But, simultaneously, your chosen channels must be viable for your budget and future plans.

For instance, you may find that consumers like to buy products like yours directly online. That could suggest a direct channel where you sell through a dedicated online store. Starting to sell online is no small undertaking. Nested inside of that single task are a hundred other to-dos that take time and money to execute:

• Designing an ecommerce website
• Going live
• Getting traffic
• Orders being placed
• Learning to manage inventory
• Nailing logistics for shipping and delivery

If your brand doesn’t have the broader goal of extending its online presence, that could be a step too far. Instead, then, you might consider using Amazon as part of a distribution channel. I think it’s these kinds of balances that play into choosing the right channels for your business.

2. Balance and align those channels.

Speaking of balance, once you’ve chosen distribution chains, you have to ensure they line up. Each channel must serve a particular purpose, or else it’s unnecessary. What you offer to customers through them all, however, must align.

Consumers won’t like finding out they can get your product cheaper if they buy it in a different way. Pricing, positioning, and promotions across channels must be carefully balanced. You must, too, consider how best to satisfy demand via all avenues. Your supply chain needs may vary by channel.

3. Combine and integrate departments and processes.

Your distribution strategy will, by nature, be multi-faceted. For each channel, you must consider diverse elements. Things such as marketing, sales, logistics, customer service, and more. I believe it’s vital to have all business areas pulling in the same direction.

Make sure that your departments all share information. Customer service agents must know about marketing promotions for particular products. Your sales staff have to be told about logistics issues, especially if they make delivering certain lines more difficult.

I find the best way to achieve cross-organizational integration is by breaking down data silos. Make sure all customer and company information is accessible by all departments. Solutions such as unified communications or customer data platforms can help.

4. Build and nurture your network.

Once you decide on the channels to use as part of your strategy, it’s time to make it a reality. That means creating a network of partners to help you distribute your goods as you desire.

You may have to reach out to manufacturers, wholesalers, or retailers, for instance. That’s not to mention other firms or service providers. People like web developers or third-party logistics (3PL) specialists.

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Once you’ve made connections, too, you should keep working to develop them. Frankly, I think keeping cordial relations with suppliers or retailers is just common sense. It makes them more likely to help you out if and when needed.

If you’re a manufacturer, it could help you, too, to provide product training to retailers. When they know your products inside-out, they’re better equipped to sell them. They’ll also be able to offer better support to consumers.

5. Evaluate and improve your strategy.

Business, whatever your niche or industry, is never static. That means that even once you’ve got an optimized distribution strategy, your work’s not done. You need to keep it as efficient as possible with constant evaluation.

That means continuing to collect customer data. Check in to see how your chosen channels are working out. Do consumers still want to buy online for home delivery? Have their preferences instead shifted to buy online, pick up in store (BOPIS)?

Continually evaluating your strategy lets you make timely improvements. I suggest adding new channels, re-balancing your existing ones, and more, as consumer demand dictates. It’s how to stay ahead of your rivals.

Supplying the right lines, at the correct time, by the best method is fundamental to success. That’s why I say it’s essential to develop an optimized distribution strategy.

Optimize your distribution strategy for more sales.

I love looking at a product and appreciating the incredible amount of effort that it took to bring it to the consumer’s hands. It’s a large, dynamic puzzle for businesses. Getting your products or services to your end-users is a priority that shouldn’t be decided in haste.

I hope these tips above can help you develop an efficient distribution strategy to help you improve sales and meet growth objectives. In doing so, you’ll enable your business to improve the customer experience, satisfaction, and win more sales.

Editor’s note: The article was originally published October 2020 and has been updated for comprehensiveness.