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
Business ideas, Marketing and sales , promotions and advertising ideas , articles
Toughening up the chain .. by Susan Tsang
Supply chain management (SCM), which holds the promise of reducing supply costs and raising product margins, is becoming even more of a necessity as technology develops.SCM is the planning and execution of supply chain activities to ensure a coordinated flow both within a company and with integrated companies.The advent of the digital age has powered business to Internet speed. Buyers go online to surf the world in search of what they want, at the best prices. Retailers are racing to keep up with consumers.Manufacturers no longer have the luxury of taking years to develop, market and sell their products. For instance, mobile phone makers have seen their design cycle shrink from 18 months to just 6 in the last few years.As customer preferences and demands shorten the lifecycle of a product, manufacturers have to produce shorter production runs to ensure minimal inventories in the supply chain to reduce product obsolescence. Further complicating matters is the evolution of the manufacturing process itself, which is becoming more global in terms of suppliers and customers. As manufacturing becomes more diverse and spreads across countries, both from a production and distribution perspective, manufacturers require improved visibility and real-time information if they are to successfully manage the supply chain and respond rapidly to market and customer demands.Manufacturers in the region are still adopting traditional SCM products in areas such as supply chain planning, factory scheduling, demand forecasting, transportation planning and warehouse management.However, as they find themselves having to respond quickly and provide information in collaborative environments, manufacturers realize that improvements are needed within their own operations.Venturing beyond traditional SCM products into new areas of:1. supplier collaboration2. customer collaboration3. radio frequency identification (RFID)4. product lifecycle management (PLM); may be in the offing.Pranav Kumar, research director of enterprise application software, with research firm Gartner Asia Pacific, estimated that collaborative planning applications, which enable the sharing of planned demand or supply data with trading partners, will take two to five years to realize itspotential.With RFID, where tags attached to pallets, boxes or items enableobjects to be tracked throughout the supply chain, Pranav projected that itwill take 5 to 10 years before it becomes pervasive.A very exciting innovation for the manufacturing industry is is PLM. Such systems tie everything together, allowing engineering, manufacturing, marketing, and outside suppliers and channel partners to coordinate activities.PRODUCT LIFECYCLE MANAGEMENTPLM is a process that leverages product information to guide products from concept through retirement. The software makes use of product information and business analysis to support the products portfolio strategies, lifecycle planning, activities management, and the execution of the activities through each phase in a products life.By providing a unified collaborative environment, PLM enables the collective knowledge of the extended enterprise to add value at any stage of a products lifecycle.PLM allows downstream players to participate in the earliest stages, which can determine up to 80 percent of a products development cost. It can manage all of the intellectual capital to support the entire product lifecycle, including product, process, resource and supplierinformation.