Indirect sales or indirect distribution of goods are sales through intermediaries. They are more characteristic of large organizations because, in order to purchase the goods of a particular firm, the client has to contact its official sales representatives. There is no personal contact between the seller and the buyer.
Types of indirect sales
- Distribution. Transfer by the producers of the right to sell their products to small wholesale and retail organizations.
- Merchandising. In lay terms — a competent arrangement of the goods at the shop-windows. Therefore, chewing gums, sweets, chocolates are laid out next to the cash desks: while adults wait for the queue, children lure sweets. The same is with the essential goods — they are above the eye level, because, first of all, the buyer will pay attention to the goods located below. The type of product and how it is presented to the consumer, depends on the sales ratio.
- Franchising. This is a "lease" of a well-known trademark. Buying a franchise and deducting an interest to the brand owner, the businessman takes off a lot of problems: he has a particular tactics of doing business and his own clients. Bright examples of franchising are Subway, McDonald's, Lukoil.
- Dealership. In this case, the intermediaries of the company are special agents — dealers. Buying goods at a wholesale price, they resell it with an extra charge at retail to other firms. It differs from the distribution in smaller volumes of purchases.
There is no personal contact between the seller and the buyer. Sales are carried out by third parties.
Advantages of indirect sales
- Increase in the sales network (up to abroad);
- Raising level of products distribution;
- Efficiency of the current work;
- Knowledge of the state and prospects of the markets;
- Expansion of the target audience;
- Minimum costs for the organization of jobs.
Disadvantages of indirect sales
- Break of personal connection between the seller and the buyer;
- Inability to monitor and track the goods independently;
- Dependence of the company reputation on the behavior of the intermediary.
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