The ultimate purpose of any business is, of course, sale. Your goal as an entrepreneur is to provide products or services to their final users; sometimes the path can be straightforward, as it happens for small business, sometimes it flows through marketing, distribution, sales teams, and more… This integrated approach requires an understanding of sales channel and its importance.
Don’t worry, we’re here to help! In this article, you’re going to learn anything you need to know about sales channel strategies.
What is sales channel?
Sales channel definition
A sales channel is the term with which we include all the strategies, approaches, and ways we can use to sell products (or services). Thinking that you can have only one sales channel (for example, your local business, or your online e-commerce) is a common mistake that some beginners make.
In fact, you can exploit multiple sales channels: they can be platforms (you can sell on Amazon, eBay, and more at the same time), they can be partners, kiosks, door-to-door salespeople…
All these different channels, however, don’t provide the same income. That’s why you need to have a sales channel strategy so that your resources can be distributed wisely, costs can be optimized, and profits enhanced. Furthermore, your sales channel strategy also includes marketing and distribution, other than the mere selling sector.
Types of sales channels strategies
There are different types of sales channel strategies, and it’s important that you know that you don’t have to pick one. This section is meant to build awareness about all the resources you have at your disposal to pursue the final goal of selling.
Direct Sales
Direct sales include all your strategies in which you can sell your products directly to your customers. They include online sales channels like e-commerces, but also retail stores, catalogs, and any other occasion that you have to showcase your product and offer the customers the possibility of making a direct purchase.
Indirect sales
Indirect sales strategies are those in which there is some kind of intermediary between the manufacturer and the final buyer. For example, a distributor: Nike doesn’t sell all their, say, shoes directly. They have many distributors all around the world.
You should take into consideration the same principle: you don’t have to sell all your products directly. You can sell them to distributors and this would be part of your indirect sales strategies.
Furthermore, you can be the distributor! As you may know, dropshipping is a great opportunity for anyone who’s interested in selling business. In this case, you have the role of the intermediary between the manufacturer and the final customer.
Marketing
Marketing is also part of your sales channel strategy. Email marketing campaigns, online ads, social media marketing are all tools that you can use to pursue the final aim of selling.
Examples of Sales channels strategies
1. Single sales channel franchise
Single sales channel strategy Doesn’t necessarily mean that you only had one sale spite. Franchises and have many stores located in the country, or all around the world, but this remains a single sales channel. Because the intermediary between the manufacturer and the final customer is only one: the retail stores, even if there are many of them.
A single sales channel strategy has the advantages of lowering the costs, and maintaining dominance - if your brand is strong enough to have the build such dominance - But it also has some cons: for example, you may be losing many opportunities if your focus is only on a single sales channel.
2. Shopify sales channels
Your Shopify e-commerce can be a single channel strategy or part of a multiple channels one. One of the most effective ways of exploiting your Shopify platform is when you use it to support, for example, your retail store. This way, you’d be able to reach a wider audience and a different demographic.
It is well known that, while millennials and younger people prefer to buy online, the older generations are more used to traditional physical retail stores.
3. Multiple sales channels with Dropshipping
Dropshipping can be a huge resource for a multiple sales talent strategy. The only channel that you can exploit is the retail store because the essence of dropshipping is that you don’t manufacture or store the products you’re selling. Many drop shippers limit their channels to one or more e-commerce and only exploit online sales channels. As we have seen for franchises, however, having four or five e-commerce Websites running doesn’t mean you’re exploiting multiple sales channels.
So, how can you use a multiple sales channel strategy with dropshipping?
For example, you could use good old catalogs. Don’t think this is an obsolete sales channel, it all depends on your targeted audience. Of course, millennials are going to prefer shopping online than through a catalog, but what about older people? Furthermore, the online shopping market is saturated, with competitors that are so huge and powerful (Amazon!), that finding alternative sales channels and target audience can be your winning move.
Another way of exploiting dropshipping and multiple sales channel strategies is to have distributors. Other than considering yourself a distributor, you can also provide items for other distributors as well. You can supply small retail stores in your town, for example, and become their reference point to widen their offer with items that come from all around the world.
Conclusion
As you can see, sales channel strategies are many and diverse. This doesn’t mean that you have to pick one among the ones we’ve described. On the contrary, the aim of this article was to provide you with overall knowledge about the topic. Now, you can build up your sales channel strategy, and it can - and should - take count of everything we’ve discussed so far.
You don’t have to pick one among direct or indirect sale strategies; you need to know about their existence, what‘s the difference is between them, so that you know how to exploit both of them. At the same time, if only one is suitable for your business, you should limit it to that one with no hesitation. Once you have the proper knowledge, you can make the decisions for your business and for your goals!