Hidden Distribution Costs

    March 8, 2007

I recently went to a soap shop in downtown San Fransisco called Lush. It is the most expensive soap I have ever seen, and a perfect product for the web. My girlfiriend asked the clerk if they sold online and they said yes, but don’t buy Lush soap from Amazon.com.

If you opt into distribution of your product the way to win is to give extras when people buy direct. As a marketing strategy, it is silly to recommend people avoid your distribution partners. Once you give up distribution you move toward being a commodity unless you add extras or are selling a buying experience.

Even companies like Adobe are canibalizing portions of their business to maintain their market position. When considering opting into other networks or doing things that extend your reach and give you more direct control over the conumer experience it is probably best to stay as close to the consumer as possible.

If you are a product on the shelf you have to pay for shelf space. If you own the shelf space you can sell your own product or sell overpriced ads to others.


AddThis Social Bookmark Button