A wholesale firm may form two separate brands, one for their distribution channel and the other for themselves to sell in the market. This means a firm, instead of giving out on sales function, themselves are part of the market acquisition. Restaurants, retailing and industrial selling are some of the markets that practice dual distribution strategies. Franchising is the most widely adopted business marketing concept where an individual, after availing necessary licenses and norms, can sell marketers products in the market. With a dual distribution strategy, some firms roll out their business licensees, some franchises and operate some units themselves.
Some of the important protocols that a manufacturer should keep in mind while establishing a dealership relationship are as follows:
Frame a customized distribution strategy
Clear communication and agreement on the rights of distribution channels
Hire effective and competent distribution partners
Design a payout module
Retain direct sales right
Maximize direct revenues
A module is beneficial to all the stakeholders, i.e., manufacturers, distribution channels, and the end consumer.
Advantages Of Dual Distribution
Following are some advantages of dual distribution:
Dual distribution helps a firm to reach a large market base.
It enhances the sales volume.
Promotes effective brand marketing activities in the market.
It minimizes the firmsâ€™ capital requirement, operating cost, monitoring cost, etc.
Reduces stress on workload.
It helps in scale-up market share.
It helps to ease the burden of cost and sales.
It ensures smooth physical transmission of goods to the users in the market.
Disadvantages of Dual Distribution
The disadvantages of dual distribution are as follows:
Dual distribution can bring in unhealthy competition among distributors.
This can lead to vertical channel conflict.
Restricts or reduces direct customer interaction.
Dual distribution is cost inducive.
It may lead to misrepresentation of the brand in the market.
Due to various gaps with the dual distribution, the product may get sidelined.
It may impact the revenue aspect.
It requires regular control of communication, which is time-consuming.
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