A Sales Channel for Every Product

A Sales Channel for Every Product

When launching a new tech product, your sales channels are as important as the rest of your marketing campaign. Your sales channels are what ultimately closes the deal, where the actual consumer purchase takes place. So, it’s no surprise that sales channels are such an important component of any marketing program.

Your sales strategy should make sense for your product and audience. Here are a few interesting sales channels for the tech industry:

Direct to Consumer

Many startups think that eliminating the intermediaries between themselves and the consumer is the most direct path to profit. We’ll let you in on a secret: It’s not. There are TONS of moving parts in a direct to consumer sales strategy. Make sure to analyze every component and budget the resources (and effort!) it would take to go the direct to consumer route, and be sure it makes sense for your company.

Manufacturer Reps

Hiring manufacturer reps can be a hit or a miss. If you come across a manufacturer rep with strong sales skills, a good reputation and solid relationships with your dream dealers and/or retailers, hold on to them!

Remember that manufacturing reps never take possession of the product. Instead, they’re paid a commission on the sales that are done within their territory or with specific customers per your agreement with them.

As they are most likely working with a whole portfolio of products – not just yours – it’s important that they clearly understand the benefits of your product and that you provide them with the correct support and materials to facilitate the sale.

Distributors

Distributors will purchase the product from you and resell it to dealers or retailers. There are a few considerations to keep in mind if you are thinking of working with a distributor:

  • Scope of coverage – Choosing to work with a national or regional distributor will depend on your sales goals and production capability. Even if you are working with a national distributor, you might want to evaluate if there are any territory gaps you could cover with a regional distributor.
  • Marketing support – Just like working with a manufacturer rep, you will have to provide product training and marketing materials to a distributor. The big difference here is that distributors will also require financial support to promote your product.
  • Is your product the right fit? – Distributors are a solid option for simple-to-use and popular products or those that fall within the distributor’s specialization. Products that require a steep learning curve could be cast aside by the distributor’s sales team in favor of easier sales.
  • Sales Margins – Your margins will be smaller when working with a distributor because you need to consider the distributor’s margin as well. But you will profit from consistent sales and an expanded sales force.

Retail

Retail space is gold in the sales world. If you’re considering adding retail to your sales channels, there are two fundamental instruments for your success: Packaging and POP display (point of purchase). Your product must be able to sell itself based on those two elements. If it needs more help than that, you’re better off choosing another sales channel.

Direct Sales Force

Your own sales force gives you additional control over how your product is presented and sold. Your sales team would work with your target audience, whether they’re consumers or through B2B channels.

But there’s a huge downside: Overhead. Between salaries, benefits and travel expenses, a direct sales force can quickly become one of the costliest sales channels. You can also hire on commission, a trend we’re seeing more of these days.

No matter what sales channel you choose, hiring a sales manager with industry knowledge, a proven track record and willingness to travel will be a key component to your product’s success. Always remember that at the end of the day, you must choose a sales channel – or a combination of channels – that make sense for your product.

If you’d like more insight on how to choose the right sales channel for your product, you can get in touch with us here.

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