Customer Relationship Management

Not many companies are aware of the concept of channel sales. In fact, most of them are not aware of the concept of a Channel Sales Representative. Companies that do know about Channel Sales, they don’t know the benefits of Channel Sales or the major Companies who are embracing it. This blog will cover the meaning of Channel Sales, why should you use it, and its examples.

Let’s dive in!

What is Channel Sales?

Channel sales is the process of developing partnerships with third parties to ensure a larger audience for your goods and services, and thus aid in business expansion. A greater exposure for your product and services could result in increased sales, revenue , and gross profits.

This type of partnership lets you leverage the existing customer base of a well-established company to grow your own customer base. However, it usually results in selling your products and services for sale through these platforms. In such cases, the only thing that is considered is the extent to which the increase in sales compensates for the lower profit margins over the long term.

The most important thing to keep in mind when implementing this strategy of selling is the fact that you’ll have to collaborate closely with people you’re partnering up with to ensure that they’re using the right strategies and plans.

Why should you use Channel sales?

Channel sales might not be a good fit for every business, but they have substantial advantages over direct sales. The biggest benefit is low-cost distribution.

Through partnering with various sales channels, small businesses can expand their business without the expense of hiring and training an internal sales team. Companies with larger budgets can also utilize channels to gain a better control of their sales by studying every channel rather than analysing all sales across the entire market.

In addition, channel sales may build trust by promoting a product and increase the efficiency of revenue growth and provide customers with access to bonus products.

Sales Channel Examples

1. Resellers

A reseller buys a product from the firm that makes it, then resells it to the end-user who is intended to earn a the benefit of. In essence, a reseller acts as an intermediary between the firm which produces a product and the end-user.

In this situation the buyer will generally directly contact the reseller to begin the purchase, and the reseller will then work with the sourcing company to complete the order.

2. Affiliate Partners

A partnership with an affiliate retailers pay a commission to the owners of websites as well as individuals, companies, and businesses who market their products. The affiliate partners usually receive an amount of the sales they bring into.

3. Distributors

Distribution channels offer products directly to consumers. Certain distribution channels include agents, websites or companies that act as intermediaries between the businesses who manufacture the product and the buyer.

4. Wholesalers

Wholesalers are a kind of distributor who is specialized in placing physical products placed on shelves in order for consumers to purchase. Wholesalers typically have sales representatives who help offer their merchandise to stores.

Wholesalers are typically wholesalers who sell food and other products to restaurants and retailers like Costco which purchase their products directly from the manufacturers and then sell them to their customers.

5. Value Added Reseller

Value added resellers (VAR) are businesses who specialize in buying and selling technology products with added features or software that go above and over the features that are included in the product.

An example of a valued added reseller is the computer manufacturer that sells hardware with a different company’s software already installed.

6. Independent Retailers

Independent retailers are business owner that runs an independent retail business which is not associated with any brands or franchising. For instance when an entrepreneur starts and operates a boutique for clothing without the assistance of a parent business, they’d be an independently-owned retailer.

7. Dealers

Dealers offer products directly to the end-user, however, they operate differently from retailers that sell a variety of various items. The most well-known kind for dealer would be an auto dealer, who offers and leases automobiles directly to the customer.

8. Agents

In this way, agents act as intermediaries and is not a part of the control over the products or services they sell. Agents facilitate transactions between sellers and buyers and assist in negotiating.

An example of this can be real estate. An agent for real estate or broker isn’t the one of the home and selling it to buyers, however, they oversee the entire process until an agreement can be reached, and then the transaction is completed.

9. Consultants

Channel consultants assist in the creation and effectiveness and effectiveness of channels for sales. People in this position typically work with manufacturers, retailers distributors, manufacturers, and vendors to ensure the efficient distribution of a product the customer. While channel consultants aren’t able to directly sell, they do play an essential role in ensuring that the sales channels run smoothly.

So, this was our 2 cents on the definition of Sales Channel, its uses, and all the examples. If you think, we missed something or anything we should write about next, please let us know in the comments below.


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