A good product does not automatically become a good business.
Many SMEs reach a point where they have a product that customers want, a few reliable buyers and perhaps even a growing sales pipeline, but growth remains inconsistent. The problem is not always demand. Sometimes, the business simply has not figured out the most effective way to get its offering to the market.
A route-to-market strategy answers a simple question: How will your business consistently get the right product or service to the right customer, through the right channel, at a cost that allows you to make money?
That question goes much further than deciding whether to sell online, through distributors, from a physical shop or through sales representatives. It requires an SME to understand its customers, how they buy, where they buy, what influences their decisions, what it costs to reach them and whether the business has the operational capacity to serve them once they arrive.
This is why route-to-market should not be treated as a sales decision alone. It sits at the intersection of market strategy, sales, distribution, operations, finance and customer experience.
The starting point, therefore, should not be the channel.
It should be the customer.
An SME may be tempted to ask, “Should we get into supermarkets?” or “Should we start selling on social media?” But those questions come too early. Before choosing a channel, the business needs to understand who it is trying to reach and how that customer actually buys.
The U.S. Small Business Administration recommends looking at factors such as demand, market size, customer location, competition and what customers currently pay when assessing a market. It also emphasizes that businesses need to understand their specific customer base rather than assuming that everyone who could potentially use the product is the target market.
Consider a small food-processing business producing packaged snacks. Its potential market might include individual consumers, supermarkets, independent retailers, hotels, restaurants, schools and corporate buyers. These are all customers, but they do not buy in the same way.
A consumer might discover the product on Instagram, purchase it from a nearby shop and pay immediately.
A supermarket may require supplier registration, consistent volumes, product documentation, negotiated margins and specific delivery arrangements.
A hotel may care more about reliability, quality specifications and the ability to deliver repeatedly.
An institutional buyer may have a formal procurement process and payment terms that stretch over several weeks.
The product may be the same, but the route to market is fundamentally different.
This is why customer segmentation is so important. The question is not simply, “Who could buy from us?” It is, “Which customers are strategically attractive to us, and what does it take to serve them well?”
Once the priority customer segments are clear, the next step is to understand their buying journey.
Customers rarely move directly from discovering a business to making a purchase. They may first become aware of the product, investigate alternatives, compare prices, ask for recommendations, speak to a salesperson, request a sample, visit a physical location, check reviews and then decide whether to buy.
The channels used at each stage may be different.
A customer might discover a business through social media, evaluate it through its website, ask questions on WhatsApp, receive a quotation by email and ultimately make the purchase offline.
This matters because having several customer touchpoints does not automatically mean that a business has a multichannel strategy. The channels need to work together.
McKinsey’s work on sales and channel management similarly emphasizes that businesses need to consider not only how and to whom they sell, but also the channels they use and the operations that support those channels. Its research also highlights the increasing movement of customers across channels.
For an SME, this does not mean trying to be everywhere.
In fact, trying to be everywhere can be one of the quickest ways to dilute limited resources.
An SME may launch an Instagram page, join an online marketplace, hire sales agents, approach supermarkets, open a shop, recruit distributors and begin attending trade fairs—all at once. Six months later, it has multiple channels but limited insight into which ones actually generate profitable customers.
The objective should not be to accumulate channels.
It should be to build a channel mix that makes commercial sense.
There are several possible routes. An SME can sell directly to customers through its own physical location, website, sales team or social-commerce channels. It can use distributors and wholesalers to extend geographical reach. It can sell through retailers or established marketplaces. It can form partnerships with other businesses that already have access to the target customer. Or it can combine several of these approaches.
Each has a different economic and operational implication.
Direct sales can give an SME greater control over pricing, customer relationships and the customer experience. But the business also takes responsibility for acquiring customers, processing orders, delivering products and providing customer service.
A distributor can provide access to a much broader market without requiring the SME to build the entire distribution network itself. Distributors can hold inventory, manage logistics and provide local market knowledge. But that access comes at a cost, usually through margins, commissions or other commercial arrangements.
Retailers can provide visibility and access to established customer traffic, but they may impose listing requirements, promotional expectations, payment terms and margin structures.
Digital marketplaces can provide discovery and scale, but the SME needs to account for platform fees, commissions, fulfilment costs and the extent to which it can actually build a direct relationship with the customer.
Partnerships can sometimes be particularly powerful because they allow a smaller business to borrow another organization’s reach, credibility or infrastructure rather than building everything from scratch.
None of these models is inherently better than the others.
The right choice depends on the customer, the product, the geography, the complexity of the sale and the economics of serving that market.
This is where many SMEs need to change how they think about channels.
A channel that generates sales is not necessarily a good channel.
Imagine an SME selling a product for $20. On paper, the business generates $20 in revenue every time the product is sold. But after distributor margins, retailer margins, transportation, packaging, sales commissions, promotional discounts, payment fees and returns, the amount left for the business could be significantly lower.
Another channel might produce fewer sales but deliver considerably better margins.
That is why route-to-market decisions should be evaluated using profitability and cost-to-serve, not sales volume alone.
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McKinsey’s research on channel management highlights the importance of understanding channel performance, sales investment and the economics of different routes to customers. Its research in fragmented markets also emphasizes understanding cost-to-serve and identifying specific pockets of growth rather than treating an entire market as one homogeneous opportunity.
For an SME, this means asking questions such as: How much does it cost us to acquire a customer through this channel? What does it cost to fulfil the order? How much margin remains? How quickly do we get paid? How frequently does the customer purchase again? How much sales effort is required? And, perhaps most importantly, can we scale this route without costs and complexity increasing faster than revenue?
The last question is critical.
A route to market may work perfectly at 50 customers and become completely unmanageable at 500.
Suppose an SME currently sells directly through its founder. The founder knows the customers, negotiates orders, coordinates deliveries and handles complaints. This may work while the customer base is small.
But as sales grow, the founder becomes the bottleneck.
The business may then need a sales team, CRM system, distributor network, inventory system, logistics partner or e-commerce infrastructure.
In other words, growth changes the route to market.
The channel that makes sense at one stage of the business may not make sense at the next.
This is also why SMEs should not assume that digital automatically means online-only.
Digital tools can strengthen physical routes to market just as much as they can create new ones.
A business might use social media to generate demand, WhatsApp to manage enquiries, mobile payments to collect money, a CRM to track prospects, digital inventory systems to manage stock and a logistics platform to coordinate deliveries—while the actual product continues to move through retailers or distributors.
McKinsey’s research on fragmented retail describes how digital tools are increasingly being used to improve existing distribution models rather than simply replacing them.
The opportunity for SMEs is therefore not simply to “go digital.” It is to identify where digital technology can remove friction from the customer’s journey or reduce the cost of serving the market.
There is another issue that deserves attention: channel conflict.
An SME may sell through retailers at one price while simultaneously selling directly to consumers online at a significantly lower price. The business may see an immediate increase in online orders, but it could also undermine the retailers that helped it build market access in the first place.
Similarly, a distributor may be investing in developing a territory while the SME begins approaching the distributor’s customers directly.
A route-to-market strategy therefore needs rules.
Different channels may need different product bundles, territories, customer segments or service models. Partners need to understand what they are responsible for, how they will be supported and how potential conflicts will be handled.
The objective is to make the channels work as a system rather than allowing them to compete against each other.
For SMEs operating in African markets, these considerations become even more important because the path from producer to customer can be fragmented.
An SME expanding from Nairobi into another county, or from Kenya into another African market, cannot assume that the route that worked in its home market will automatically work elsewhere.
Customer density, retail structures, distributors, transport costs, payment practices, regulations, standards and purchasing behaviour can all change.
The market opportunity may be attractive, but the cost and complexity of reaching that market may be very different.
This is particularly important when considering regional expansion. Access to a larger market does not automatically translate into access to customers. The business still needs a practical mechanism for reaching them, fulfilling orders, receiving payment and providing service.
That is why route-to-market strategy should be designed alongside the SME’s financial and operational plans.
A large contract may look like a major breakthrough until the business realizes that it must produce significantly more inventory, extend credit to the buyer, hire additional staff and finance the order for 60 or 90 days before receiving payment.
Sales growth can therefore create a working-capital problem.
A customer who pays immediately may be more valuable to an SME than a much larger customer who pays after three months.
The real economics of a route to market are therefore found somewhere between revenue, margin, cost, cash flow and capacity.
This also changes how SMEs should approach experimentation.
The business does not necessarily need to determine its perfect route to market before entering the market. It can test.
A food producer might test direct consumer sales against independent retailers and one distributor. A professional services firm might compare referrals, partnerships, outbound sales and digital lead generation. A manufacturer might test direct B2B sales in one territory before appointing a distributor across an entire region.
The important thing is to define what success looks like before the experiment begins.
The business could track customer acquisition cost, conversion rate, average order value, gross margin, fulfilment cost, repeat purchase rate, payment time and sales per outlet.
Over time, these numbers reveal which channels are producing not just customers, but economically valuable customers.
This data-driven approach is especially useful because route-to-market decisions should not be permanent assumptions. They should be reviewed as customer behaviour, competition, technology and the business itself change.
McKinsey’s research on channel optimization recommends continuous monitoring of channel performance, customer insights and metrics across the sales funnel so that businesses can identify what is working and adjust the model accordingly.
Ultimately, designing a route-to-market strategy is about much more than deciding where to sell.
It is about designing the commercial pathway that connects value proposition to customer, customer to transaction, and transaction to sustainable revenue.
For an SME, that pathway should answer a few fundamental questions.
Who are our highest-priority customers?
How do they prefer to discover, evaluate and buy?
Which channels give us credible access to those customers?
What does each channel cost us?
What margin do we retain?
How quickly do we get paid?
What capabilities do we need to serve the channel?
And can we scale it without compromising quality, cash flow or customer experience?
The answers will be different for every business.
A manufacturer may need distributors. A consulting firm may need relationship-led B2B sales. A consumer brand may combine retailers with direct-to-consumer channels. An agribusiness may need aggregators, institutional buyers and regional distributors. A technology company may rely on partnerships and digital acquisition.
There is no universal route.
What matters is whether the route has been deliberately designed around the realities of the market and the capabilities of the business.
Because ultimately, the question for an SME is not simply “Where can we sell?”
It is:
“What is the most effective and sustainable way for us to reach the customers we want, deliver the value they need, and do it profitably?”
That is the foundation of a route-to-market strategy that can support growth rather than simply chase sales.
And as the business grows, that route should evolve with it.