Part of the challenge of marketing is figuring out which distribution method to use for your business. As soon as you decide which business or product category to compete in, distribution decisions must be made based upon what your competition is doing.

Service businesses may or may not be subject to the same physical distribution limitations as product-based businesses. For example, financial planning services may be offered from printed material, sold at retail, sold by consultants face-to-face, or delivered electronically by computer, by phone and by correspondence — a multitude of different distribution systems.

Distribution decisions have significant implications for:

• product margins and profits
• marketing budgets
• final retail pricing
• sales management practices

Distribution channels can include one or more of these options:

• retail — stores selling to final consumer buyers (one store, or a chain of stores)
• wholesale — an intermediary distribution channel that usually sells to retail stores
• direct mail — generally catalog merchants that sell directly to consumer buyers at retail prices plus shipping (e.g., Land's End, L.L. Bean) via mail
• telemarketing — merchants selling directly to consumer buyers at retail via phones
• cybermarketing — merchants selling directly to consumer buyers at retail prices, or business-to-business products and services at wholesale prices via computer networks
• sales force — salaried employees of a company, or independent commissioned representatives who usually sell products for more than one company
• For more on this subject, see our discussion of distribution and sales methods.