How To Beat Your Competitors By Locking Up Distribution Channels
If you are a cabinet marker you have a ton of things you do on a day to day basis to operate your business. You have to order supplies, make sales calls, and respond to customers. These aren’t…
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If you go to the toothpaste aisle, what you will discover is the toothpaste aisle has thousands of different choices. Every single one of them is a variety of Crest toothpaste.
You can get Crest with tartar control, you can get Crest without tartar control, you can get big Crest, you can get small Crest, you can get purple Crest, you can get Crest that has sparkles, you can get kiddy Crest, you can get adult Crest. All of its crest.
Now a retailer like CVS charges hundreds of thousands of dollars to the manufacturer just to put a product on the Shelf. You actually have to pay for placement.
So why in the world would Crest be paying for an entire wall fullof Crest and in fact why would they even have all those different varieties given that there’s only one active ingredient in any of them which is fluoride and every single one of those varieties contains the same amount of fluoride.
The reason they have all of those different varieties is so they can buy the entire wall and fill it up and none of their competitors can get in this shelf space because CVS even if people are paying for placement. CVS is not going to carry four aisles of toothpaste. They’re only going to tightly going to carry one aisle so what Crest is doing very sneakily is they’re actually locking out the competition and it doesn’t matter if there are people out there that have a better product at a lower price.
They can’t get in front of the customers because Crest has them locked out. So I often say that what business strategy is it’s how can you force yourself to win without having to produce a better product at a lowerprice, which is a horribly cynical way of thinking about it but I actually thinkit’s kind of accurate in today’s world.
So another, so one way to lock people in is to crowd everyone else out the way the Crest does in the toothpaste aisle. Another one is to have agreements with distributors. So let’s say that you are a producer of intellectual capital. You write books or you’re an expert on some topic and you do courses.
You go online courses and you do them through Udemy or through different schools or you do them through joint ventures. Well if I do a course in how to retouch photography on Udemy, well everyone’s doing a course on how to retouch photography and that’s not going to get me any unique visitors.
I’m not crowding anyone out but under this strategic principle of can I lockout distribution what you could do is you could maybe do a joint venture with someone who has a large photography list but part of your agreement is you won’t feature anyone else doing this topic.
I’ll give you my best content and I’ll give you content that no one else has as long as you don’t feature anyone else on this topic for the next nine months.
What you’ve just done there is you’ve got yourself a monopoly on that audience for nine months that even if someone has better content than you, they can’t get in and that is again locking up your channels of distribution.
One more example that applies to virtually anyone who’s marketing anything on the Internet is SEO. If you notice if you search for a product on Amazon, I mean whoever looks past the first ten results? Almost no one.
So those first ten results, isn’t it funny how like four of them are Amazonand three of them are Best Buy and four more of them are you know Kmart or some other gigantic large fortune 500 company.
It’s not a coincidence, they have warehouses full of people that are constantly optimizing because search engine optimization is a strictthese. Because everyone finds their information through the internet searchengine optimization is itself a strategic move.
That’s how you lockout your competitors from even being seen and in fact I mean you know I mean I’m saying this like it’s a good thing I actually think it’s a bad thing overall because I have been in cases where there was some really wonderful amazing manual for how to do something or online course that I saw once wanted to find it again but somebody else had optimized a different webpage for the same keywords and has higher ranking and any time I tried to search for the original high quality awesome amazing content instead I got this website that was a complete piece of crap except that it had been optimized for just those keywords./
So to summarize locking out distribution you want to lock out distribution by limiting anyone else’s ability to be able to get to people for a limited amount of time or a limited amount of space except for you during the time that you want to lock out distribution so that’s that’s one way that’s one competitive response you can make
It’s definitely a strap I mean it’s definitely a strategy or has strategic implications.
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