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Choosing the right sales channels

Customers do show preferences to buy certain goods in a particular way. For example, they may buy stationary supplies online, see an IT specialist for their IT needs, and book travel via the phone. So consider who your customers are and how they will buy from you, to sell your product effectively. Once this is done set about creating a sales channel. This is simply the channel by which business provides a product to a customer.

Choosing sales channels
Direct or indirect are the two choices here. Direct is selling where you have direct management and control over who is selling. Plus how and when as you are using your own resources and staff. Indirect selling it where you outsource the sales to another company to sell your products under contract, and they use their resources.

Performance monitoring
Whatever the channel you use, be sure to review it regularly. Each channel needs to be working at optimum level and as markets fluctuate the channel may need tweaking. Consider these points:
  • What is the sales revenue each channel has achieved?
  • What is the support cost of each Channel? e.g. training, advertising, sale literature.
  • What amount of management does each channel require? e.g. dispute resolution, payment queries.
Direct Selling

Sales Team for face-to-face selling This can be an expensive option so close monitoring of effectiveness is paramount. But sales teams can be essential in some cases, for example:
  • High-value product which requires only a few sales to gain business objectives.
  • A luxury item that needs high level involvement from a sales person.
  • Product features/benefits need in depth explanation.
  • Sales cycle requires attention from initial interest to purchase.
  • Buying requires a decision from more than one person.
Sale Team for telephone selling (telemarketing)
This method has a bad name because of the cold calling at times potential customer find intrusive, e.g. evenings, weekends, meal times. However, done well it is a very effective method. It is also one of the most cost effective method for getting sales, promoting the business, and making repeated sales. There are numbers registered at the telephone preference service , which your staff cannot call. Also a written spiel or script to read off is obvious to customers and can turn them off immediately. Telemarketers need to be skilled on the art of conversation and in creating friendly image for the business. Training in every aspect of the product is essential. If a customer has questions that can't be answered immediately and with confidence a sale can be lost.

Trade shows and exhibitions
These bring a huge opportunity to get attention for your product/service to a targeted audience. It may also put the product in front of regional buyers who you may not get to unless you visit personally, e.g. farmers who work their properties constantly, they may not be internet savvy. Trade shows can get you a lot of queries and perhaps a lot of leads that need to be followed up. These may not become sales. Watch the potential expense on these options. But it is a opportunity for you to speak with people and see what they are needing.

Bids and Tenders Tendering is a major sales channel for supplying the public sector, high value business contracts or ongoing supplies of goods and services. Bid preparation can be labor intensive, but the benefits of winning a contract can bring long term benefits and a very good revenue. Do some research on the time it will take to prepare the bid, the chances of winning and the contract value if you do win, before you decide to bid.

Online Shop
There are two options for selling online, have your own website/store or sell via other online stores e.g. Ebay. Online selling is a growing industry and many businesses use this as their only sales channel. Less staff may be needed, but marketing is very important to get a high volume of sales. Also consider time and costs involved in packaging and shipping. A shopping cart is the usual way, and you'll need a merchant account, or paypal for the payment via credit card. Most carts will have a good backend admin, and keep track of sales history, payments. If you don't have a lot of knowledge research avenues to have one set up for you. Online selling works well if you have:
  • Products or services that are well defined and don't require a large sales spiel or intricate explanation.
  • Fixed prices for all potential customer types.
  • Products or service that can be delivered in a predictable lead time, and won't cost a fortune to ship/post.
  • High volume sales
  • Low to mid value sales
  • Intangible products e.g. eBook downloads, audio files, digital data files or codes.
  • A service for a fixed amount customers can pay in advance. E.g. web banners for $15ea, gift vouchers for $10, 250wd articles for $5ea.
Indirect Selling
Cost can be cut as resources aren't needed to sustain the sales other than producing more products. Even so, care needs to be taken in whom you choose to sell your product. Consider some of these disadvantages:
  • Will you have a relationship with the user?
  • Sacrifice some control over the brand
  • Need to see the indirect sales force is promoting products correctly and within agreed boundaries. It's nice to find out you sold an extra 200 items but not so good if they've been sold at half price without consent.
  • Will indirect seller buy product from you to sell on, or will you be responsible for filling orders?
Resellers
Have businesses of their own and perhaps products or services of their own as well. They also offer services from others which they often package to value add to their own products. This type of reseller would be in the industry of IT and engineering. At times a reseller can be promoting similar products to yours as well so care need to taken to get you product/service promoted equally. Normally the order is placed with you once received and a quick turnaround is expected. An exclusive geographical territory can be required.

Sales Agent
Can be self-employed or another business. They sell your product/service in return for a commission on the sale price. If they sell under your name or their own will decide if you have any contact with the end user. Normally a sales agent is chosen because they are a specialist in the product field and in sales. They often have a client base they can sell to, and generate leads themselves. Or they can be used to convert your own leads to a sale. Very effective when:
  • New product needs to be launched or tested.
  • Need to test a possible expansion into a new market.
  • Need to supplement your own sales force, temporarily or permanently.
Retailers
Can be a great choice when selling to consumers. Consider if you product can be sold off the shelf or needs specialist sales. Also think about the geographic area you want to cover and the amount your production/warehouse can put out. Retail outlets generally work through a central buyer (the middle man) so often it is them you need to pick up your product and promote it to the retailers. This is not always the case. Reliability is very important, retailers will want to know you can supply in a timely manner without them needing to have empty shelves.

Wholesalers
Bulk buyers who will then sell the product on making their own profit. Large amounts are expected to be sold at discounted prices because there is no need for marketing or sales costs to you.

Making Your Channels Work Together
Sales channel choice is based on cost effectiveness, the most appropriate and performance. Businesses may choose several avenues to test at first and keep none or all of those. Multiple channels can multiply successes but can have their negative side as well. To meld them nicely it may be better to choose fewer and let others get introduced along the way.

Using indirect sales channels distances you from the customer, so excellent communication is the key. Be sure:
  • Your chosen sales channels are trained in the product and your particular brand.
  • Keep in regular contact with sales channels
  • To brief them fully on any technical or product changes
  • They have the incentive to sell your product.
Even thought the last point may seem obvious, it isn't always as clear cut as first thought. Multiple sales channels can lead to disagreements as to who's sale it is, which can lead to a disinterest to actively sell the product. The thought process here is that if I put in the work and don't get the credit or commission for the sale then why bother? Let the other person work for it if they get the credit for it etc. Set boundaries and guidelines that are clearly define and black and white, areas of overlap and shades of grey will get challenged. As an example, you may have key accounts that are only to be sold by your direct sales force. Therefore, you would not incentivize an agent to sell to those accounts. You could hand them a 'hands' off list of accounts the y must not sell to. However you do it, make the lines clear and in writing. Just telling them isn't always good enough. Time spent arguing over whose is what is time and money lost selling the product. Prevent it occurring by making solid boundaries.
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