Business of distribution

Distribution in very simple terms is taking goods and services from producers to consumers (or retailers who take it to consumers). The task of distribution has paramount importance in a consumer business. You can produce the best product in the world but unless there’s a well-oiled machinery to take that product to the consumer, you cannot be successful. On the other hand, if you are the distributor with the best reach, you can attain success by taking a good product and placing it in the market. This market dynamics gives the distributors unparalleled strength in the power play in their industry.

Pharmaceutical industry is one of the industries where distributors play a very important role of taking innovative drugs and making it accessible to the consumers worldwide. Another industry where distributors play a commanding role is entertainment. In case of movie distribution, its more of an oligopoly where a few studios control the worldwide distribution of the movies. A few publishing houses control the publication of majority of best sellers and a few television network have the bandwidth to reach millions of consumers.

Till very recently, and in many ways even today, the business of distribution in almost all industries is a game of few big players. Over the last few years, internet has played its role to pose an interesting challenge to the traditional players in this space. Though the challenge is still not big enough to create a dent in the business of distribution for the traditional players, it will be interesting to see how the business will adapt or how a new breed of distributors will leverage the digital media to distribute products to the world in more efficient and cost-effective ways.

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