You are more likely to find these products on the company website or in one of its stores. For instance, Apple primarily uses a direct sales strategy when selling its laptops and computers. Similarly, the approach varies by product. You should weigh the pros and cons of each strategy to figure out which is the best fit for your new product.Īlso, keep in mind you don’t necessarily have to choose one strategy exclusively over the other.
The answer depends on your company - its financial situation, the product you’re selling, and your target market, among other things. There’s no clear-cut answer as to which sales strategy is best for business development. Which sales strategy is best for business development? So, in addition to shipping the products to the third-party vendor for sale, you also have to give up a cut of your profits. For instance, a potential partner may ask for a certain percentage of all goods sold in the store. In all likelihood, this will come in a monetary form. When entering a partner program, you have to make concessions. If a third-party vendor arbitrarily inflates a cost, it could impact the price strategy your team chose.Īnother problem with channel sales is you won’t see 100% of the profits. A channel manager could help mitigate this risk, but you have to pay that person a wage, which will increase costs.īusinesses must work hard to control the price at which the third-party vendor sells the product. One of the biggest problems associated with channel sales is a loss of control.īusinesses don’t have as much say over how a third-party displays or sells its products. Similarly, because you’ll already have partner relationships, it becomes much easier to distribute new products.Ĭhannel sales can be an attractive sales strategy, but you should consider the big picture first. Instead, the company can focus its attention on the quality of its goods and services and on growing revenue. Because the vendor or reseller is handling the sales process, the company doesn’t have to worry about building up or training an internal sales force to accommodate new customers. The channel sales model takes the burden of selling from your internal team and lets employees focus on other work.Īdditionally, channel sales allow companies to expand their product and service lines more readily. Doing so will allow you to focus on other areas of your business, like product development or operations. Instead, you’ll need to find the right partners to distribute your product. You won’t need to invest heavily in sales and distribution.
If you’re a business owner focused on other parts of your company, a channel sales strategy could be beneficial. On the other hand, with a channel sales model, companies need to inform third-party vendors of changes as they occur.Īdditionally, direct sales mean all the sales proceeds return to the company’s pockets as opposed to being divided between the business and a third-party vendor. Because all the selling is handled in-house, it’s easier for businesses to communicate developments and updates to the sales staff. The later in a product lifecycle you make a change, the more the change costs.Ĭhanging your sales process is also simpler under a direct sales model. Not only do direct sales provide companies with valuable information about their client bases - they also allow businesses to find and identify issues because they hear complaints directly. The people creating the products communicate regularly with those who purchase them. Because the entire lifecycle of the product - from manufacturing to the final sale to the end-user - is handled in-house, there’s constant communication among the team.įurthermore, there is a lot of feedback from the consumer. A direct sales model offers numerous advantages for businesses.
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