Creating a product people love is just the first step in a long process (but it is the most important one). Once you’ve created something that lots of people want to buy and you’ve managed to tell the world about it – it’s time to sell it.
Companies basically sell their products in two ways – directly and using channels. The sales model you choose will have the most profound influence on your business success and it will be hard to get out of it, once you established it.
Direct sales is a model where a company sells their product directly to the consumer without using the services of a third party. This seems pretty straightforward – it saves the money you would spend on different retailers and it lets companies communicate directly to their consumers on a daily basis. It also provides a sense of exclusivity to the product (it’s something that can be bought only at specific places).
Think of Apple. It offers a specific customer experience by having a highly trained technical staff whose job is to guide the customer trough the sale. Also, when Apple sells their products using third party retailers, they do it to boost already significant sales and reach worldwide market.
Using direct sales can also be helpful when the company needs to change something in their sales process. When you do it all by yourself, there is no need to keep many people informed. In case of emergency direct sales, companies can pull the product off the shelves without having to keep hundreds of retailers informed about the decision.
Channel sales use the services of third party retailers to reach a wide base of customers. Retailing is a sophisticated business with a lot of rules and expertise of its own. Building an infrastructure and educating employees in this business takes time and money; that’s why companies decide to outsource the selling part of their business to those who know how to do it and have the right resources to do it well.
Channel sales are adaptable to the needs of your consumer. Take asset remarketing as an example. Companies tend to use a variety of sales channels based on the scale and nature of the assets that are being sold. Traditional room auctions can be used to sell high value items and to boost the competitiveness of the process. Webcast auctions enable people at remote locations to participate and sometimes these channels are combined. On the other hand, invitations to tender are used for highly specialized assets that are usually not of the interest to the larger public.
Companies which use channel sales can focus their efforts on the product itself. They also benefit from the faster expansion to different markets.
Which one should you choose?
Well, this isn’t an easy question to answer because it depends not only on what kind of business do you have but on what kind of business you plan to build in the future. It may be a good idea to organize your sales around the business you have now, but if you’re sure that your company will grow in the immediate future, maybe you should prepare right away.
If your business has offices in multiple cities or countries, you should definitely go for channel sales, because logistics are too complicated otherwise. Also if your products are complex and require maintenance, this is the option for you
On the other hand, if you want to build the relationship with your customers or you’re just starting – sell your products directly to the customers for starters, especially if the products have (relatively) short life span, so the customers need to keep coming.