 When deciding where the best outlet is, or who the best sales representative may be to sell your product, consider the motivation and appropriateness of the channel of distribution you are considering using. It is natural to think how great it would be to have the big box stores like Wal Mart and Target sell your products. Everyone would like to have their products in thousands of stores with lots and lots of customers. Or you can imagine how nice it would be to have the top broker in the market represent your line. Having a broker who is well connected and is known for selling lots and lots of products seems like a good match on the surface. You might envision having your product in thousands of outlets overnight or having expert sales people making presentations for you everyday.
Be careful what you wish for. If you did get distribution in a large account would you be able to service them properly? Could you meet their desired inventory delivery dates and response times? Can you deal with their reporting requirements, return policies and other special requirements?
Would the prices they demand give you enough margins to be profitable? What happens if you gear up for huge production runs and then a large account drops you or doesn’t order what they project? Are the prices that large accounts often demand prices that you can live with and make money at? Would you be better off with a smaller account or sales group where your product or service would mean something to them so your products could get the attention necessary for them to succeed? Would you be better off where the sales of your products means enough to your sales partners that they would fight for the chance to get and keep a customer for you?
The amount of explanation or the level of instructions required to use your product is also an important factor to consider when trying to determine who is capable of selling it for you. Does your product require explanation for customers to see its benefits versus your competition or does it speak for itself? Can your product be sold with a quick phone call sight unseen by a person with little or no training or does the decision to purchase require multiple detailed explanations to many people and multiple decision makers over a long purchase cycle?
When selecting the proper sales channel be certain that the people representing your product have, or will learn the knowledge necessary to properly explain the relevant features and benefits your target customers want.
Ask your self how much time and attention do you realistically think you can get from your sales people. Does a sales person have the ability to make a lot of money from a single sale of your product or do they need to sell thousands before the commission adds up? How much time and effort will be necessary to get and make the required sales calls? Will your product or service require service after the sale? Is there the possibility of repeat orders or is your offering a one and done proposition.
How important are relationships in your marketplace? Who has the proper contacts needed to reach your prospective targets? Can the buyers of your product or service be easily identified or are special connections and industry contacts necessary to get an audience with prospective buyers? Do the prospective buyers of your product or service buy any other products from you that are important to them or do they have other relationships with your competitors that may make them reluctant to switch vendors? Are the outlets you select consistent with the level of quality and service and relative price you are trying to establish for your product?
When matching the appropriate channel and sales network to your product or service you should also keep in mind future new product introductions and growth plans. Will the decisions you make today be able to work for you a year to three years down the road or will you need to re-evaluate the whole situation again in six months?
Asking and answering each of the aforementioned questions will go a long way in helping you to determine what channels of distribution and what sales approach may work best for you. If you select the proper sales channels you will be on your way to making the most amount of money with the least amount of effort.
About the Author – Scott Francis is President of Topline Development LLC a Strategic Marketing Consulting Group that provides helps companies determine how they can make the most amount of money with the least amount of resources. To learn more about Topline Development LLC visit their web site at www.ToplineDevelopment.com or contact Scott directly at scott@toplinedevelopment.com. |
