Advantages Of Franchising And Distribution

The rapid expansion of the market economy has largely been made possible due to the advent of globalization. Today the idea of business is no more confined within the geographical boundaries, instead it has become global. In order to survive in the competitive market it is important for each and every business unit to take its products and services right to millions of potential consumers. But it is not always possible for any single entity to do that. This is why franchisee or distributorship has emerged as an important part of modern economy. Distributors, though not directly related to company, are entrusted with the task of selling the products of a specific brand to retailers in a certain region. There are certain advantages of distribution and franchising if the company can choose the right and most competent distributor or franchisee.

Direct to the consumer

The main advantage of distribution or franchising is that companies can easily take their products directly to the consumers. This gives a boost to the business as a whole and allows companies gain a global exposure all at once. It is needless to mention that in order to survive in the competitive market it is important for each and every business unit to grab the attention of the consumers on the very first go. A distributorship business helps entrepreneurs do exactly that.

Increase market share

Another important advantage of distribution and franchising is that companies can increase their market share to a large extent. With the help of distributors companies can create a demand for their product in the market, thus outrunning their competitors in the market. Though it is true that market saturation leads to diminishing demand, companies can find more and more new markets with the help of distributors. Thus, companies can largely enhance their presence in the market by selling their products through distributors.

Increasing profits

Selling products through distributors can also help companies increase their profit level to a large extent. It is not possible for a business enterprise to open its own outlet in each and every city, town and village in the world and so selling the products through distributors can be the most effective and reliable way of increasing profit margin. The steady expansion of the global economy has made it absolutely necessary for each and every business organization to make the best possible use of its resources.