Distributors look at the total dollar amount of margin earned from stocking each firm’s products last year. Based on that, each Distribution Channel will decide how many stores will stock products from each firm.
The total amount of margin a Distributor receives is affected by your:
- Retail Price
- Retail Margin and;
- Volume of Sales
So all other things being equal, if you sell more products, or increase your Retailer margin then more Distributors will be willing to stock your products and your distribution indexes will increase.
The number of each type of distributor willing to stock your products is then combined with the shopping habits of each segment to give a segment level distribution index. This is why you see different distribution indexes in the Market Summary / All Product Details report.