Distribution Cost Advantage

Distribution Cost Advantage

A source of competitive advantage that depends on the efficient delivery of a product or service to customers.

Distribution Cost Advantage

A comparative advantage that one company has over another because of its ability to deliver goods or services more quickly and less expensively. For example, a flower delivery service in the town where the order was placed has a distribution cost advantage over an identical service out of state, as it can deliver flowers more quickly and cheaply.
References in periodicals archive ?
Fact Sheet Northwest Distribution Cost Reductions Low-cost carriers have a ticket distribution cost advantage -- Low-cost carriers sell a higher percentage of tickets over their own Internet sites, which have lower distribution costs than other purchase outlets.
We observe from our own studies, for example, that companies selling $4 billion or more of annuities enjoy a 35 to 70 basis point distribution cost advantage over smaller competitors--which may translate into a 1% to 2% improvement in return on equity.
From a purely financial perspective, a distribution cost advantage of 50 basis points translates directly into an increase in return on equity of nearly 1.
This sales practice has resulted in very strong persistency of its policyholders and its agents (who also are members of the society), and has provided the society with a favorable distribution cost advantage relative to many commercial life insurers.
Full browser ?