Unlocking the Power of Distribution Channels: A Key to Successful Product Launch
As a product manager, you’ve finally cracked the code to solving a real problem, and you’re ready to share your innovative solution with the world. But, have you stopped to think about how you’ll get your product in front of your target audience? The answer lies in distribution channels – the methods or platforms that allow your product to reach and be accessed by its intended users.
What Are Distribution Channels?
Distribution channels can be either direct or indirect, depending on whether the product is sold or delivered directly to users or through intermediaries such as stores, retailers, or agents. They can also be physical or digital, depending on whether the product is a tangible object or a software service. In this article, we’ll focus on digital distribution channels for IT products.
Digital Distribution Channels for Software Products
Here are the typical digital distribution channels you should consider for your application, along with their pros and cons:
Direct Downloads from Your Website
This traditional model allows users to download your software directly from your website. While it provides full control over the distribution channel, it’s susceptible to piracy and requires manual updates.
Software as a Service (SaaS) Platforms
In this model, no code is hosted directly on users’ computers, and instead, it’s provided via an internet browser. This means users always get the newest, safest experience, and you can monetize easily on an ongoing basis. However, it requires high server costs and dependency on cloud providers.
Distribution via App Stores (Google Play, Apple App Store)
Distributing your product as a mobile app via Google or Apple brings access to a massive market of mobile users. However, it requires talent to create mobile apps, and you’ll need to share approximately 30% of your profits with the store provider.
Cloud Marketplaces
Similar to mobile stores, cloud marketplaces can mean large open markets for specific products or stores dedicated to specific plugins or digital assets. While they offer targeted audiences, you’ll still be dependent on the host store policies and have to share a cut of profits.
Hybrid Solutions
The good news is that these solutions aren’t mutually exclusive. You can mix and match them to get the best setup or maximum coverage. Think of Microsoft Office Suite, which offers downloadable, cloud, and mobile versions, all giving access to more or less the same set of features.
The Importance of Distribution Channels
As a product manager, choosing the right distribution channel will profoundly impact the future growth and decisions you make about your product. So, how do you decide? Choose a channel that gives you the biggest market and makes it easier to prove product-market fit. Remember, your product’s goal is to grow and be profitable, and everything else is secondary.
Examples of Effective Distribution Channels
Let’s look at two examples that illustrate how to navigate deciding on your product’s distribution channel:
My Course Distribution Channel
I started my product management teacher career journey with a course on Udemy. While it did an excellent job of marketing and getting me off the ground, a change in Udemy’s strategy forced me to go independent on a self-hosted web page. This transition was scary, but ultimately successful, and allowed me to have full control over how and for how much I market my products.
Software Moving from Downloadable to a SaaS Model
Microsoft Office used to be only downloadable, but then came the SaaS model, where users pay a few dollars every month to get access to Office services. This monetary influx allowed Microsoft to create a complete solution, where a single Office account can be used across PC, Mac, Linux, and mobile apps.
Key Takeaways
When it comes to distribution channels, prioritize user reach and work on optimizing it based on the success you build. Focus on attracting users and proving your product works. If you can do this and know your channel distribution options, you can choose and perhaps later pivot to the right ones. Good luck releasing your great products!