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Sales channels to reach your customers

Selling through retailers, wholesalers and other distributors
Selling through an intermediary may be a more cost-effective way of reaching your end-customers than selling to them directly.

If you are targeting business customers who prefer to deal with large suppliers, selling directly to them may not be a realistic option. Instead, you might aim to supply wholesalers who have existing relationships with those businesses.

If individual consumers buy low value quantities of your products, the best option might be to target retailers that sell similar products. Or you might choose to focus your efforts on a relatively small number of wholesalers who can in turn supply your products to many retailers.

Other distribution channels may also reach your end-customers. For example, technology suppliers often sell to resellers who can configure and install the technology to suit end-users’ particular needs.

Managing your distributors
You need distributors who will value your product. If they sell competing products, what will make them push yours?

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Think about how you set your prices. Distributors will be more enthusiastic if they can make a large profit – but setting too low a price will eat into your own margins.

Effective advertising and promotions can be vital. As well as marketing to the distributor, you can promote your products directly to end-customers. Distributors will be keener to stock and sell products that their customers are asking for.

The key terms of the supply relationship should be covered in a written contract. Key issues might include:

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how much stock the distributor will hold
what the distributor will do to promote your products
how quickly you can resupply and minimum order levels
whether the distributor has exclusive rights to your product (for example, in a particular territory)
what happens if either you or the distributor want to end the relationship

 

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Spare Parts Supply Chain

Spare Parts Supply Chain

When you buy any Computer or Electronics Hardware or equipment, normally one of the questions asked to the sales person is “What is the Service Support” provided by the company.

Today the brand image or market demand rides not only the quality of the product but on the quality of service support too. Service support is critical in industries like Computers, Telecom, Aero spares, etc.. In all cases the response time and availability of the spares become critical. In all cases corporate installations demanding onsite support coupled with critical downtime service level measurements have pushed the suppliers to set up an efficient spare parts supply chain.

Take the case of an installation of a server in a bank’s central processing division cannot afford to be down at all. The company who installs the server is required to ensure that service engineer is available at site during normal hours and on call basis on 24 × 7 basis. It is not enough to have the engineer attending to or being available at site; the required spare parts need to be available.

Critical and high value spare parts have to be made available in a nearby warehousing location and logistical arrangements are required to be made to reach it to the site in a fastest and quickest reach time, which is a few hours in most of the cases. The site engineer most often can perform diagnostic functions and report back to the service team. The service support team would then escalate the matters to the technical experts who get involved in solving the problem. All of the coordination and problem solving along with logistics arrangements is required to happen in a matter of hours. Such critical performance levels are documented in the service agreements and in most cases 99% up times are required to be committed by the company supplying the server.

Similar situation exists in aero spares parts supply chain too. Airplanes can develop snags in any location and not necessarily at the base where they operated from. Therefore, the logistics of having to locate the defective part, requisitioning the part besides the request being directed to the central spare parts warehouse by the 3PL service provider and managing to airlift or courier the part in the fastest mode is the normal requirement in this industry. Most of the parts are high-value parts and cannot be stocked or warehoused in all locations as inventory. Airplanes cannot be grounded for a long time which would result in heavy losses to the airlines. The down time allotted for preventive maintenance itself is very less.

Aero spare parts supply chain has also been built around processes to ensure fastest lead times and ready availability and immediate retrieval of the right component.

In most cases the essential spare parts are kept in stock at the country level based on the number of installations or volumes of sale under each category of product. In case of non availability the parts are called for on urgent basis from a regional distribution center normally available at a regional level servicing a continent and flown down on urgent courier mode.

In all cases ensuring minimum downtime is the key factor that drives the spare parts process which involves logistics service providers, warehouses, customer service teams and technical teams working in tandem to ensure customer satisfaction.

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Authorship/Referencing – About the Author(s)
The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.

 

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