Pros and Cons to consider when working with distribution channels

Distribution tips: Pros and cons of working with distribution channels

Posted by Nicole Kow on Sep 1, 2016

To get your tourism products out to your target market, you're going to have to market your tours like a professional. As a SME, you might not have the resources, financially or knowledge-wise, to tackle this large task. A great solution would be to work with multiple distribution channels to get your products in front of the right customers, i.e. people who can and will make a booking with you.

Here are a few pros and cons to help you figure out which distribution channel to prioritise. 


Pros: We'll start with some really good reasons to work with distribution channels


1. Strategic and effective marketing

Like I mentioned earlier, you might not have the expertise, the time or the financial resources to invest into your marketing activities. That's okay. It is why resellers like OTAs exist. Since their business depends on getting you customers, they're likely to be more capable at marketing your products. Paying them a commission for each customer you get is a far superior option than having no customers at all. 


2. Exposure to larger markets

Depending on your company's goals and marketing strategy, working with the right distribution channel can give you access to larger markets and a wider audience. For instance, you could partner with your local DMO to gain international exposure, or sell your tours on a niche OTA like Diviac to specifically target diving enthusiasts. There are plenty of options out there, you need to find a reseller who matches your long-term business objectives. 


3. They have the digital infrastructure you might lack 

If you're just starting out and still lack the financial capacity to invest in a booking system or website builder like TrekkSoft, working with an online distribution channel like Viator or Get Your Guide is a great temporary solution.

They already have the digital infrastructure like a mobile optimised site, and online booking and payment facilities that you can use to grow your company. Just be mindful of how much commission you are charged per customer to make sure that you get the better end of the deal.



Cons: On to some not-so-good effects of working with distribution channels


1. You are now dependent on external factors

Part of working with distribution channels means relying on other companies to stick to their word, or in business speak, their terms and conditions of the partnership. While they are unlikely to make abrupt changes in the way they work, your resellers are free to make changes to things like the commission they charge per customer. Find ways to mitigate such risks and you will be able to ensure a win-win relationship for all parties involved. 


2. You'll probably require a bit of time to set up your distribution channels

It can be incredibly time consuming to work with distribution channels so it is up to you to decide if it's worth it. Your decision to work with any distribution channel shouldn't be a knee-jerk reaction to what your competitors are doing, rather it should be guided by your business goals and objectives.

To simplify the process and day-to-day management, use TrekkSoft's Channel Manager to keep track of all your bookings, adjust your capacity across channels and much more. 


3. It can be difficult to convince resellers to work with you

Some distribution channels like DMOs can be incredibly picky when it comes to working with tour and activity operators. The reason is simple: resellers do not want to work with products that don't sell. To avoid this, you need to do your research. Find out who your resellers sell to and what their customers want. Then, tweak your products to suit their target market. Again, this requires huge efforts on your part so you need to decide if it's worth it for your business. 

Do you know of any other pros and cons of working with distribution channels? Let us know in the comments below! 


Interested in boosting your distribution efforts? Let us help you out. 

Distribution channel tips ebook

Nicole Kow

Written by Nicole Kow

Having graduated from the UK, Nicole travelled around Europe before joining TrekkSoft's marketing team. She is now based in KL and regularly blogs about her travels at Next Train Out.

Topics: Marketing tips

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