Costs of Distribution Channels

Obviously, financial resources and cost-effectiveness are important in considering distribution and sales force options. What can you afford, and what will give you the most bang for your buck?

For example, Life Designs, an independent architect specializing in residential work, has identified three primary distribution channels for its residential design services and estimated costs for each one:

• Media sales: This channel is composed of competitors who advertise in local city and county magazines, newspapers, and real-estate flyers, subdivided by home-design only firms and home-design and industrial-design firms. Ad inquiries are referred by the various media groups carrying the ads. This quasi-sales force is paid on commission for referrals that turn into jobs.