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The aim of this article is to expain why retails sales and traditional product distribution are often being replaced by direct sales and intellectual distribution.
To begin, let me highlight what I mean by retail selling and traditional distribution: In traditional distribution, manufactured products are sold to wholesales. The wholesalers then sell those products to retailers and the retail outlets sell the products to the consumer at a significantly higher price than the purchase price. Retailers have no choice other than to do this, as they have to pay for advertising, employee salaries, utilities, etc. and those costs must be transferred to the customers if the retailers are to make anything.
Intellectual distribution is the ability to provide product information to the potential customer, who then buys from the manufacturer (direct sales).
Have you ever visited a shop to enquire about product prices, only to return home and identify the product much better priced Online? The product you are ordering is the same in every way, but on the Internet you may be purchasing it directly from the wholesaler or even the manufacturer. The World wide web has impacted on the way companies promote and teach us about their products and the costs to the consumer are significantly lessened as a direct result.
What does this mean for retail selling? Can you see why many retailers and shops are suffering? Is this trend going to continue?
I believe that it is the older generations who are be less skilled using computers, keeping large sections of the retail industry from crisis. Imagine what will transpire when the majority of the population are online and buying directly from the manufacturers. Many people do grocery shopping online, Christmas shopping on the internet, we purchase books, cds and dvds online! Is there any limit to the products that we can purchase directly from wholesalers or manufacturers?
The situation is that retail distribution is declining and direct sales is booming. This may be a very bad thing for retail outlets (look what happened to Woolworths in the UK!), but a great thing for direct sales businesses (i.e. Amazon).
As individuals we can capitalise on these economic trends. Firstly, we can buy goods from direct sales companies. Also, we may be able to partner with a direct sales company, promoting the products and services they distribute. You can be an independent distribuor and make money from any sales you generate. This is ideally suited for the Internet and is definitely something worth considering in the 21st century!
author: Dr. Andrew Smith, webmast for the blog at www.winonline.biz/blog/. To learn how to make money online please visit www.winonline.biz/
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