While Barbie has struck a creative marketing strategy for now, this added distribution channel is a huge vulnerability for many large companies that cannot afford to alienate their distributors. The inevitable conflict with traditional distributors is perhaps the hardest thing for established companies to confront. The distribution system that has served established companies so well to date was designed for a different world, one in which retailers, distributors and resellers were the contact point with customers. In the past it was much cheaper for a customer to go to a store than to go to each individual manufacturer, so most sales have been done through an indirect distribution system. But now companies have found that in the Internet world the cost of customer contact is not only much cheaper but it can be turned from a cost into a benefit.
Companies can get more information and more loyalty and can sell additional products that way.
The marketer with an individual connection to a customer has more sales incentives and opportunities. But while relatively new companies like Dell Computer have used direct distribution to their advantage, older companies such as Compaq and HP are struggling between developing direct relations with customers and keeping longstanding middlemen happy. The fact is that middlemen will have to change, too. Distributor Egghead Software, founded in 1984, offered early evidence of the problem. Customers would go to a store, get information and then order cheaply from a catalog.