Once you have decided to take the plunge into channel sales, the next step is narrowing down exactly which option is the best for your company. Here are some of the key differences among the types of resellers we outlined earlier this week.
• Manufacturer’s reps: Reps sell only a few, select product lines. This doesn’t mean their offering is limited: in the electronics industry, a rep that sells Tyco is likely to sell connectors, power products, relays, passive components, wire and cable etc. It’s unlikely that a rep will also sell your immediate competitor’s products. Reps usually operate regionally and have a high degree of expertise in their product area.
• Wholesaler/distributors: Distributors usually carry a wide variety of products and warehouse massive amounts of inventory. Many distributors partner with reps. Distributors buy in bulk and are afforded volume discounts but will sort volumes into smaller orders for customers. They may carry competing product lines. Most support their product lines with salespeople, technical support, overnight delivery and a variety of product-specific services. Distributors may operate locally, regionally, nationally or globally.
• Retailers: Retailers may buy from distributors or directly from suppliers. These are the storefronts of the industry with expertise in merchandising, promotions, rebates, advertising etc. Most own warehouses; and some will specialize in franchised brands. Benjamin Moore paint, for example, is usually carried by specialty shops and not by Home Depot. Retailers may operate locally, regionally, nationally or globally.
• Value-added distributors: Value-added resellers also buy in bulk but perform some type of service for end customers. In the electronics industry, VARs will assemble various computer components into a full system; download software and provide on-site support. VARs may operate locally, regionally, nationally or globally.
Next: what kind of customer do these channels target?