Sean Everett explains why distribution channels matter for scaling. Walmart and other gatekeepers control access to customers. Companies that build both products and their own distribution, like podcasts using multiple free channels, grow faster than those relying on direct sales alone.
Good morning. It's a beautiful Saturday here. Let's go deeper into distribution channels and why they are so important for high-growth businesses. So let's redefine distribution channels. What are they? A grocery store is a really good example, right? It's a distribution channel for every product that it has on its shelves. Department stores are another example. Like Sears used to be a big, a big one in the past. JCPenney, right? It's a collection or an aggregation of a number of different products and brands and also an aggregator of an audience or a customer base. So you could think of it like a marketplace where they all come together. But in pretty much every industry like industrials, enterprise, even consumer with social media, the idea is that even talent networks actually to help people with skills Distribute their talent and get matched with companies that are hiring. So here's the thing about distribution channels and why they're so important. Imagine you had to go to every single person on the planet, knock on their door, and convince them to buy something. That is like the direct-to-consumer, direct-to-enterprise sales model. And so that obviously becomes very inefficient. And so the question is, how do you scale your activities where you can do one thing as one person and get a 10x result out the other side of that? And the answer is distribution channels, right? So you can put your one product through Walmart and get it in front of millions of consumers. That's really valuable, but they charge you a fee. They're a gatekeeper. Right? So they mark up the price on the product, and that's how they make money. So the really interesting companies are the ones who both create their own products or services and create their own distribution channels, because then not only do they reduce their marginal cost of creating a product or Right? And removing some of their competitive pressures, but they also have the ability to distribute that product out to customers. So think about this podcast, right? So I could literally go to every single person, send them an email, send them a tweet, send them a direct message, or I could go through distribution channels that have been set up already. And I've got probably 15 that are happening right now. So not only am I creating my own content, I'm also creating and leveraging distribution channels, which are entirely free. And that's allowed me to grow the listener base of this podcast by, well, it's doubling every week, which is crazy. I mean, that type of growth rate just doesn't happen. So, That's the power distribution channels. Uh, let me know what else you got cooking and, uh, if you've got any set up. Love to hear about it. Have a great day.
