The difference between logistics and distribution is primarily in the way they’re planned and organized. Logistics is mainly concerned with the storage and transportation of products, whereas distribution is concerned with the products’ placement in relation to the end users.
Both logistics and distribution are crucial in your delivery operations. Below, you’ll find more information about their differences and how they relate to your stock, whether you’re using a warehouse location or want to know how you should be monitoring your goods at other locations.
What Is Logistics?
Logistics involves the strategy behind storing and transporting your products. It’s the planning you use to keep your goods in stock and to transport products in the most effective, cost-efficient ways.
The process of logistics includes:
- Managing your warehouses: You need to know how your goods are being handled when they are still in storage or at a warehouse. Your products might have special conditions they need to be stored in, which makes storage an important part of logistics.
- Managing your inventory: The production and packaging of your goods involve handling, overseeing production and checking the quality and the quantity of the items.
- Arranging for transportation: Your distribution channels are important to the quality of your products, which begin with a point of origin and end up distributed at their chosen destinations. Transportation can be inbound or outbound.
What Is Distribution?
Distribution involves making products readily available for your business partners and customers. The main purpose of distribution is to find the most effective and cost-efficient shipping or transportation possible for your products.
Distribution focuses on:
- The storage of your products: Goods need to move smoothly in and out of storage.
- How orders are fulfilled: You need to be able to quickly retrieve the correct products to match your orders. You have to prepare everything for transportation with the appropriate packaging and clear directions.
- How your goods are packaged: The speed of the packaging process is important in product distribution.
- Handling of returned items: When customers need to return a product because it’s damaged or a mix-up happened, handling these returned items is also part of the distribution process. You will need to find another customer to sell the returned item to and can offer a discount if the item is defective.
What Is the Difference Between Distribution and Logistics?
Many sellers wonder if distribution and logistics are the same process. “Logistics” and “distribution” are often used interchangeably even though they are distinct operations. Confusion about the distribution versus logistics process is mainly because they’re directly linked and involve the same things, like packaging, storage facilities and shipping carriers. It’s easy to get confused about how they differ because both logistics and distribution are required for making deliveries, and one is unable to be successful without the other.
The key differences between logistics versus distribution are:
1. The Function
Logistics concerns planning, while distribution is more about how your products are actually moving through the sales funnel. Both are important for getting the products to end users, but the logistics aspect mostly involves coordinating with partners and setting up a sales strategy.
2. The Result
Without using solid logistics, you will struggle to get products to the correct locations by the time your customers or retailers expect. Without distribution methods, your products are unable to move at all.
Since logistics involves planning and is more about communication, it results in the setup of efficient distribution. The result of distribution is selling your products and collecting income.
3. The Benefits
Practicing good logistics will keep your company’s numbers stable and will help significantly with management practices. Even with the best logistics team, you will also need distributing partners who can move your products without damaging them at an affordable price.
The benefits of good logistics are:
- Well-planned and coordinated product stock
- High-quality products
- Good communication practices
The benefits of good distribution are:
- Deliveries that arrive on time
- Products that arrive in a good condition
How Does Logistics Work in the Sales Funnel?
Logistics works indirectly in the sales funnel. The planning stage for delivering your products takes place before you complete your first round of sales, but it will continue to be relevant as your business grows. Like marketing, logistics is about the strategy behind having a successful flow of goods from storage to your endpoints, and logistics can involve interacting with your customers.
Managing your logistics is an integral part of your supply chain that affects the entire sales funnel — if your logistics is poor, you will run out of products, produce low-quality products or run into numerous other issues.
Inefficient logistics is the same as poor planning. You want to implement the movement of your products from the initial manufacturing stage, where you’re using the raw materials needed to produce products, all the way through to the purchasing phase, where you’re preparing to ship your products in a timely order.
Understanding logistics is different for every company because your data will vary depending on factors related to your products and brand.
How Does Distribution Work in the Sales Funnel?
When you’re overseeing the transportation of goods from the supplier to your point of sale, goods are moving through your company’s distribution until they reach the customers. Distribution occurs at the end of the sales funnel, after the customer has made a purchasing decision. Rather than marketing or planning, distribution is your effort to get the products to your consumers.
When you engage in distribution, you will initially retrieve your products from storage and send them to the required destination. For secure and timely distribution, it’s important to consider your logistics, use the appropriate packing materials and have a system for keeping track of your orders. If your distribution is less effective than it should be, your entire sales funnel will suffer as a result.
Consumers will find out through reviews that buyers are getting damaged products or have waited for longer periods than they expected before finally getting their orders. With a partner that offers quick delivery services to fit your customers’ needs and the right logistics practices, you are ready for new customers.
Get Logistics Solutions With ExpressIt
ExpressIt Delivery can take your company’s logistics and distribution to the next level with the latest technology. Our skilled workers are ready to help companies find room for growth. If you’re interested in logistics solutions that will make your distribution more efficient, contact ExpressIt online as your third-party logistics partner today.