Know what the implications of engaging intermediaries are and obtain a well-documented agreement before commencing business. An intermediary acts as a link between the manufacturer and the retailer. My last post talked about the direct model of distribution (one’s own sales force). No matter how you describe it, indirect selling introduces the challenge of channels. This article focuses on the latter and analyzes different patterns of loss aversion in direct and indirect channels. Customers may forge a positive bond with a third party distributor rather than with your brand, creating loyalty for the distributor and not for you. The key distinction is that these sales and distribution partners don’t work for you directly. As promised, let us look at the indirect model (via reseller, distributors, etc. indirect character of the distribution channel. Types of Distribution Channels – Direct and Indirect Channels of Distribution with Examples A manufacturer may plan to sell his/her products either directly or indirectly to the customers. Just like direct distribution, indirect distribution has its own disadvantages. Disadvantages of Indirect Distribution Channels. These include: Putting distance between you and your customers. for sales). You’re no longer selling to the public directly, instead selling to authorized third-parties who are working on your behalf to provide your goods and services. Setting up appropriate distribution channels; Finding a good EMC is not that difficult. However, less is known about other types of products such as high-involvement non-frequently purchased hedonic products. Many companies are hesitant when it comes to indirect sales. A good internet search can help you access a list. In this article, you will find 4 important benefits of having an indirect sales channel, pitfalls to avoid and tips to fully leverage the benefits of an indirect sales channel. Embracing indirect sales channels can be a big leap. The primary advantage of direct is having control and the ability to give direction to the sales team. The potentially major disadvantage is overall cost. Choosing the right distribution channel for your products is vital to the success of your business.
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