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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Nitin Paranjpe … identifying new growth engines for HLL
Executive Assistant to the Chairman of Unilever, JBIMS, 1987I joined HLL in 1987. Since then I have been through a number of assignments – each unique, personally challenging and enriching. In the last couple of years, I have been an Area Sales Manager and a Brand Manager. I have represented Central Asia on the Global Home Care Category team and I have also been the Branch Manager for South India.Two years back, I joined the Millennium team charged with the responsibility of identifying new growth engines for HLL. At the end of that assignment I moved to London to be a part of the team responsible for recommending the reorganisation of Unilever’s top management structure. Today, I assist the Chairman and ExCo of Unilever PLC, by providing them background and analysis that they would need to discharge their responsibilities effectively.The range of experiences that HLL provides, and the thrill of setting stiff goals and beating them year after year has been an exhilarating experience. I am delighted to be a part of a team of managers who are not only the brightest, but also the most wonderful human beings. It’s not often that one finds all of this in an organisation. I feel proud to be a part of HLL.