If you have to sell in large numbers, you are going to have to get help with distribution. Distribution is the means of physically getting your product to the end user. Whether customers obtain your program via an Internet Web site or a local or chain dealer, distribution is the name and means of getting it from you to them. Distribution doesn't create sales. It just gives you the mechanism to deliver them.
The profit left after distribution depends on how you go about it. If you take one route, you may end up with less than 10 percent of the purchase price. If you take another, you may hold on to almost all of it. However, you may sell a million by the 10 percent route and only single figures by the 100 percent route. So it is essential that you consider the arithmetic of distribution with an open mind.
There's also another not uncommon situation. The obvious route may not alone tip you into profit. You may need a second avenue to strike home. The most advantageous answers sometime come from unexpected combinations. Frequently they start small and grow big. To arrive at the best combination, you need to weigh every option.
Now consider your avenue of choices. Distribution historically means packing the goods on a camel, trudging them across Asia, transferring the wares to a ship, sailing across an ocean, loading the goods onto a train, hoisting them onto a cart, and wheeling them across to some central wholesalers who then deliver the product to your friendly neighborhood dealer who sells them across the counter. Every time the product passes from one link in the chain to the next, there's a price hike.
Ward Christensen began work on the first Computer Bulletin Board System (CBBS) during the Great Chicago Snowstorm in the winter of 1978 (January). They were predominantly used as an information resource for sharing text and files, much like the early FTP sites. They only began to be utilized for selling just as the Internet exploded onto the scene.
Ward also wrote MODEM.ASM, which became XMODEM, the first binary file transfer protocol, back in 1977.
Ever since software became available in the 1950s, high-value programs have usually been sold either directly from the manufacturer to the end user or via an intermediary, usually a consultancy or specialist reseller. However, the introduction of programs of near universal interest on the back of IBM's PC saw an awesome shortcut. Software began to be electronically coded, copied, licensed, shipped, and activated directly from the manufacturer to the end user via a phone line—an enormous advantage over traditional methods.
In the process, software houses adopted control techniques from many conventional markets, but in many cases it handled these transactions more efficiently than mail-order houses ever did in their heyday. For example, you can, at nominal cost, individualize software (like license plates on a car), allow people to sample it (like headphones in music stores), or allow a short period of use (like a library book).
Until the early 1990s, software distribution was still physical. Then people started using bulletin boards, FTP servers, and finally Web sites to deliver their wares electronically. Far from supplanting existing channels of distribution, electronic transfer introduced an additional one. By combining an ability to transfer software electronically with enormous rapidity with the control techniques already in place, it became possible to deliver software at the speed of sound (a technique so efficient it was adopted by Napster for the distribution of music tracks).
There are three basic routes for software distribution:
Additionally, there are variants to explore. If you are to exercise an optimum choice, you need to exploit them all.
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