One of National Furniture’s strongest features of it’s channels of distribution will be vertical integration, and will be almost completely self-sufficient as a company in it’s manufacturing and selling operations, and will take advantage of a very tight distribution chain in order to hold costs down and get it’s products to market as quickly and efficiently as possible.

The company will manufacture almost all of it’s final products.  Only some screws and knobs affixed to the final products will be out-sourced.  (For more information on the process by which National Furniture will obtain these inputs, please see the Sourcing section of the OPERATIONS chapter of this business plan.)

It will manufacture ready-to-use furniture, which it will deliver directly to one of three places: it’s warehouse for inventory, a wholesaler, or one of it’s two retail outlets. (For more information on the inventory destination, please see the Inventory section of the PRODUCT chapter of this business plan.)

The company will use two wholesale department stores to facilitate distribution of it’s goods to consumers.  It had entertained the idea of exclusively selling it’s furniture through it’s own retail outlets but realized the additional prestige of being carried in fine department stores would make it’s products more salable, both in the department stores, and in it’s own stores.   

In addition, the effect of cannibalization from competing sales will be small since consumers who tend to shop at upscale fashion malls differ from those who frequent factory-direct outlets.  Nevertheless, the products sold will be the same, only the means of distribution will be different in this case.

The consulting services that will accompany product sales will be offered solely by National Furniture.  No other companies will be authorized to provide official consulting services for company products.  This added value will help bring the consulting division into the mainstream of channels of distribution, since the consultants will often be able to ease the transition between consumer interest and purchase.  The expert opinions provided by the National Furniture consultants will make them valuable facilitators in the channel of distribution.