10 Distribution Channels Startups Overlook (But Shouldn't)
In today's competitive market, startups constantly seek innovative ways to get their products and services into the hands of customers. While traditional channels like online advertising and retail partnerships are crucial, there's a plethora of overlooked distribution channels that can propel a startup to new heights. Drawing insights from industry leaders and founders featured in recent podcast interviews, we've identified ten distribution channels that startups often overlook but shouldn't.
1. Mail Order Catalogs and Direct Mail
In an age dominated by digital marketing, the power of traditional mail can be underestimated. Before the internet, companies like IKEA pioneered mail order catalogs to reach customers far beyond their local markets.
"Ingvar creates a, you know, catalog of his wares called IKEA News... with the idea being that like, oh, rather than just what I'm limited to doing myself, I can now scale across the whole country."
[Acquired]
By sending catalogs to customers nationwide, IKEA expanded its reach exponentially. Startups can consider direct mail campaigns to cut through the digital noise and engage customers in a tangible way.
2. Showrooms in Unconventional Locations
Creating unique physical experiences can draw attention and foot traffic in unexpected ways. IKEA's first showroom wasn't in a bustling city center but in a small town, yet it attracted visitors from across the country.
"On opening day in March of 1953, there are over 1000 people from all over the country who show up and wait in line to get in... They somehow make their way to Älmhult to see the furniture."
[Acquired]
By thinking outside the box with physical locations, startups can create buzz and draw in customers willing to go the extra mile.
3. Employee Advocacy as a Distribution Channel
Your employees can be among your most passionate advocates. By fostering a strong company culture, they can help spread the word organically.
"Every person who's interviewed is given a core value to test the person against... This becomes the filter by which we say are these people legitimately here because they want to be a part."
[Masters of Scale]
Bombas' emphasis on company culture turns employees into brand ambassadors, amplifying their reach through authentic connections.
4. Strategic Partnerships with Unlikely Allies
Forming partnerships with organizations outside your typical industry can open up new customer segments. Tade Oyerinde's Campus partnered with apparel retailer Forever 21 to reach potential students.
"We recently partnered with Forever 21 to become their official education benefit provider... If you're a Forever 21 employee, you get to go to Campus and, you know, take some classes for free."
[Masters of Scale]
This partnership allowed Campus to access a network of employees who could benefit from their services, demonstrating the power of cross-industry collaboration.
5. Leveraging User-Generated Content Communities
Platforms like Reddit can be valuable for startups to engage with passionate communities and gather feedback.
"Reddit is people. The idea of Reddit is that it both reveals people and empowers people."
[Masters of Scale]
By participating in user-generated content platforms, startups can build genuine relationships with potential customers.
6. Building a Strong Brand Identity
A unique brand can set a startup apart in a crowded market. Sophia Amoruso built Nasty Gal into a brand that resonated deeply with its customers.
"I think the best and highest thing you can do with a brand is have somebody identify with it, have their identity tied to it and have it give people a sense of confidence or see a future for themselves that they didn't otherwise. And that's like peak brand."
[Masters of Scale]
Through strong branding, startups can create loyal communities that help distribute their products organically.
7. Engaging Local Communities
Danny Meyer emphasizes the importance of growing where you're planted and engaging deeply with the local community.
"Try to grow where you're planted before you just propagate... I think we know this from grapevines that the deeper those roots dig into the soil, the more flavor the resulting wine will end up having."
[Masters of Scale]
By investing in local roots, startups can build a strong customer base that helps spread the word.
8. Crowdsourcing and Community Curation
The Black List, founded by Franklin Leonard, uses crowdsourcing to find the best unproduced screenplays—a model that startups can emulate for distribution.
"Our job is really to, you know, go out and find the writers where they have great material, identify it as such and then tell as many people as we can who can do something with it."
[Masters of Scale]
By leveraging crowdsourcing, startups can tap into communities that help distribute and validate products.
9. Social Impact as a Distribution Strategy
Bombas integrates social impact directly into their business model, which not only does good but also resonates with customers.
"We set a goal to donate a million pairs of socks in 10 years and were over 140 million items donated."
[Masters of Scale]
A strong social mission can differentiate a startup and attract customers who value purpose-driven brands.
10. Adapting Proven Concepts from Other Cultures
Howard Schultz transformed Starbucks by bringing the Italian espresso bar culture to the U.S.
"I was just blown away... and I just went from one [coffee bar] to the other to the other to the other, and I was just blown away and more or less raced back to America... and said, holy shit, what's happening in Italy is the business that Starbucks has to be in."
[Acquired]
By drawing inspiration from other cultures, startups can introduce innovative concepts to new markets.
Conclusion
Exploring unconventional distribution channels can give startups a competitive edge. By learning from these industry leaders who looked beyond the obvious, startups can find new pathways to reach customers and grow sustainably. The key is to be open-minded, innovative, and willing to take calculated risks in distributing your product or service.