Which Sales Channel Is Best?
One definition of a sales channel is that “it is the pipe through which a producer’s product flows to the user.” Like all pipes it can be straight, crooked or have many branches. And reflecting today’s new technologies the pipe can have a flow of information in two directions.
Which channel is best for your business? As with all such broad questions the immediate answer is “It depends.” It depends on how your customer wants to buy, the price and complexity of your product, the length of the buying cycle and a myriad of other intertwined elements.
The most common channels today are:
· Direct, where a company’s sales people interact directly with the buyers
· Indirect, where a company sells to distributers, who in turn sell to either other distributors or buyers
· On-line, where the buyer contacts the company directly over the Internet
And, once a company decides on its main distribution channel, secondary or alternative channels often spring up. Managing the relationships that arise due to multiple channels of distribution is a difficult and time consuming process. The failure to pick the right channel can result in business failure, as key buyers are missed and competitors swoop in and win sales.
Sales channels or Distribution is one of the classic “4 P’s” (Product, Place, Promotion, Price) of Marketing. On May 3rd, Dick Lush and I will be discussing Sales Channels at 2:30 in Platform A at the Rhode Island Business Exchange (RIBX), and look forward to answering any questions you may have.