Distribution matters

Local goods and food producers need to be aware of the power of platforms, and strive to make them work for them, not against. A community-owned discovery and distribution platform like MakeGrowLocal is essential.

In the digital world, the distribution of goods and services is essentially free. Amazon, Google, Facebook, Uber, Netflix: They’re are all distributors. But because the internet makes it almost trivial for makers to connect with consumers, these companies are also the world’s best aggregators — the ones that suppliers have no choice but to work with. As of December, the 10 most valuable public consumer internet companies, which together represent over a trillion dollars in value, were all aggregators.

In the physical goods world, where the food growers and local  artisans create and deliver their goods, distribution platforms that aggregate the market’s demand must provide streamlined, friction-free user experiences, for sure, but must also create efficiencies in the sometimes unprofitable business of logistics and last-mile delivery.

distribution and last-mile flywheel

An important thought:

Success doesn’t automatically spring from owning the best interface between a supplier and a consumer, as is the case for most firms in the current era. For the growing number of startups involved in moving physical goods or services, owning and controlling distribution is absolutely a core competency—a vital part of the flywheel—and not just a commodity.

Two articles for further reading: an article discussing networks from FreshDesk, and Ben Thompson’s aggregation theory.

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