A decade ago, the Internet was poised to eliminate the middleman from the sales equation. In other words, distributors, retailers and other indirect sales channels would go the way of the dinosaur and become extinct. One distributor I know actually posted a sign—“Dinosaur Crossing”—in the lobby of its corporate headquarters.
There are a number of reasons why this hasn’t happened. However, the Internet still plays an important role in the sales process. As a manufacturer, one of your first considerations in an overall channel strategy should be how much support your product needs. Certain types of products are better suited to an online environment. The National Association of Wholesaler-Distributors has studied the relationship between product complexity and online ordering. Here are its findings:
Point-and-click: These items are purchased frequently by customers and require little to no customer support. The purchasing process for these items is simple and there is little need for ongoing support to migrate to the Internet.
Online service/support: These products are purchased online but are backed up by a customer call center.
Local service required: Products that require services such as installation, kitting or light assembly require personal interaction. Orders can be processed online, but for customized materials and services, the Internet has proven to be a poor substitute for personal interaction.
Ordering, of course, is only part of the process. In the next few blogs, we’ll look at the other roles the Internet plays and how that affects your choice of channel partners.