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Writing The Business Plan: Section 5

Part 3: Sales & Distribution Plan


Business Plan

Business Plan

Image (c) Susan Ward

Sales and Distribution Plan

Remember, the primary goal of the marketing plan is to get people to buy your products or services. The Sales and Distribution part of the marketing plan details how this is going to happen.

Traditionally there are three parts to the Sales and Distribution section, although all three parts may not apply to your business.

1) Outline the distribution methods to be used.

How is your product or service going to get to the customer? For instance, will you distribute your product or service through a Web site, through the mail, through sales representatives, or through retail?


What distribution channel is going to be used?

In a direct distribution channel, the product or service goes directly from the manufacturer to the consumer. In a one stage distribution channel it goes from manufacturer to retailer to consumer. The traditional distribution channel is from manufacturer to wholesaler to retailer to consumer. Outline all the different companies, people and/or technologies that will be involved in the process of getting your product or service to your customer.

What are the costs associated with distribution?

What are the delivery terms?

How will the distribution methods affect production time frames or delivery? (How long will it take to get your product or service to your customer?)

If your business involves selling a product, you should also include information about inventory levels and packaging in this part of your marketing plan. For instance:

How are your products to be packaged for shipping and for display?

Does the packaging meet all regulatory requirements (such as labelling)?

Is the packaging appropriately coded, priced, and complementary to the product?

What minimum inventory levels must be maintained to ensure that there is no loss of sales due to problems such as late shipments and back orders?

2) Outline the transaction process between your business and your customers.

What system will be used for processing orders, shipping, and billing?

What methods of payment will customers be able to use?

What credit terms will customers be offered? If you will offer discounts for early payment or impose penalties for late payment, they should be mentioned in this part of your marketing plan.

What is your return policy?

What warranties will the customer be offered? Describe these or any other service guarantees.

What after-sale support will you offer customers and what will you charge (if anything) for this support?

Is there a system for customer feedback so customer satisfaction (or the lack of it) can be tracked and addressed?

3) If it's applicable to your business, outline your sales strategy.

What types of salespeople will be involved (commissioned salespeople, product demonstrators, telephone solicitors, etc.)?

Describe your expectations of these salespeople and how sales effectiveness will be measured.

Will a sales training program be offered? If so, describe it in this section of the marketing plan.

Describe the incentives salespeople will be offered to encourage their achievements (such as getting new accounts, the most orders, etc.).

Lastly, when you're writing a marketing plan, you need to develop an Advertising and Promotion plan. The next page of this article provides details on how to do this.

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