Once the product(s) are selected or designed and a reliable supply of cookstoves established, the next step is to set up distribution channels that connect the supply of products to customers. A distribution channel can be direct from manufacturer to consumer, or may include several inter-connected intermediaries such as distributors, agents, and retailers.
The process can be simplified by following the decision tree depicted here:
Building distribution channels can be challenging, especially when trying to reach the “last mile” of customers. There are advantages and disadvantages to each channel, and the right approach can vary with local circumstances. For example, minimizing the number of parties in the chain can reduce the final cost to the end consumer; as each intermediary generally receives the item at one price point, adds a markup, and then sells to the next person in the chain until it finally reaches the end consumer, having multiple parties involved can affect the product’s affordability. Conversely, while it can be effective and oftentimes necessary for manufacturers or project developers to sell directly to end-users through their own channels, it is often more efficient to leverage existing networks.
A comprehensive strategy considers not only getting products to the target consumers cost-efficiently at scale, but also educating vendors and consumers, and providing after sales service. Many practitioners find success using a combination of internal and external distribution channels to reach customers. When incorporating a variety of distribution channels, it is critical to regularly review the profitability and effectiveness of each. It is also important to evaluate competitors, keeping in mind that it may make sense to explore possible opportunities for collaboration.
Care must be taken to develop and maintain these channels to ensure success. A person or team of people should be appointed to manage identification, recruitment and ongoing support for retail and distribution partners. It is encouraged to cast a wide net, as it is not always obvious who will be most excited about the products or who will be best-suited to sell. It is advisable to consider a broad list of people and groups who might be interested in selling the products. Examples include:
- Retail outlets selling similar products, such as hardware stores, grocery stores, health centers or agricultural outlets.
- Individual entrepreneurs.
- Community-Based Organizations.
- Health promoters or community health providers.
- NGOs distributing similar products.