Product vs. Distribution: Which Matters More for Business Growth?

Product and distribution are two fundamental pillars that support any successful business. While entrepreneurs often pour their passion into developing the perfect product, having the best widget on earth is meaningless if customers can’t easily obtain it. Distribution is the less glamorous yet more critical factor in driving sales and profits.

When launching a new business, founders typically start by identifying market needs and designing products that solve problems or delight customers. The product development stage calls for creativity, strategic thinking and an intimate understanding of the target demographic. Founders must engineer the specifications, functionality, styling and branding to craft an appealing product.

However, once the product creation process is complete, entrepreneurs all too often neglect distribution as an afterthought. This is a major mistake. Having an innovative product customers love is only the first step. Delivering it efficiently and conveniently into the hands of as many customers as possible is an equally challenging endeavor.

Disruptive e-commerce companies like Amazon demonstrate the immense value of cutting-edge distribution models. Their competitive advantage lies not in unique products but in their logistical mastery – massive warehouses, speedy fulfillment centers, flexible delivery options and a marketplace connecting third-party sellers with billions of customers.

Brick-and-mortar retailers likewise live or die based on strategic store locations, savvy partnerships, diverse inventory and omnichannel distribution capabilities. Any product that consumers cannot easily find either online or on store shelves might as well not exist. Without widely available access, even the best product will wither away obscurity.

Therefore, companies must invest as much energy, resources and strategic thinking into distribution as they do into product development. Distribution partners, sales channels, infrastructure and logistics determine how many customers can obtain the product when, where and how they want it. Without innovative distribution, the product ends up stuck in the warehouse gathering dust.

In today’s congested and hyper-competitive markets, distribution has become the key differentiator between breakthrough success and lackluster failure. Once multiple competitors all offer quality products with similar features, the company that gets its product into consumers’ hands most conveniently and cost-effectively wins. Therefore, entrepreneurs who recognize distribution’s supreme importance and master this complex craft will hold the competitive advantage.

In summary, designing an exceptional product paves the way for business success, but scaling efficient and creative distribution is ultimately the more challenging yet rewarding endeavor.

Here are 25 examples of when distribution beats product:

1. Coca-Cola outsells smaller soda brands due to its massive global distribution network.
2. Netflix beat out Blockbuster by offering online distribution of movies.
3. Amazon dominates retail through its sophisticated distribution of products to customers.
4. YouTube beat out competing video sites by harnessing user-generated distribution.
5. Facebook defeated MySpace by opening distribution to everyone with a profile.
6. McDonald’s grew rapidly through franchising its brand and distribution system.
7. Uber expanded ride-sharing quickly via its app-based distribution model.
8. Spotify’s streaming music platform gave it an edge through digital distribution.
9. Nike maintains market share through contracts with thousands of retail distributors.
10. Red Bull sold widely by distributing outside of traditional retail locations.
11. Walmart’s large network of stores gave it distribution advantages.
12. Microsoft Windows succeeded by distributing with PC makers.
13. Android phones outsold Apple early on by distributing through many carriers.
14. Airbnb matches travelers to rooms via its app-based distribution platform.
15. Tesla is expanding with investment in distribution infrastructure and dealerships.
16. Instacart gained an advantage by distributing groceries ordered through its app.
17. Disney distributes content through theme parks, theaters, streaming and more.
18. Google became dominant by distributing search via any web browser.
19. CNN gained viewers by pioneering 24-hour TV news distribution.
20. Twitter distributed rapidly as a free social app on app stores.
21. Craigslist beat newspaper classifieds via its online distribution.
22. Netflix mails DVDs directly to customers for distribution.
23. eBay providedindividuals access to auctions through its distribution platform.
24. ClassPass grew fast by distributing gym credits via an app.
25. Guitar brands sell more by distributing through guitar shops.