SEL - Sales Channels [LESSON]

Sales Channels

Sales channels are the methods used by a company to market its products to consumers. Direct sales are straight from the company to the customer. While indirect sales involve the use of an intermediary.

There are basically four types of sales channels: Direct selling, selling through intermediaries, dual distribution, and reverse channels.

Direct Selling – direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Modern direct selling includes sales made through the party plan one-on-one demonstrations and personal contact arrangements as well as internet sales. A textbook definition is the direct personal presentation demonstration and sale of products and services to consumers usually in their homes or at their jobs. Intermediaries – a marketing channel where intermediaries such as wholesales and retailer are utilized to make a product available to the customer is called an indirect channel. The most indirect channel you can use (Producer/manufacture to agent to wholesaler to retailer to consumer) is used when there are many small manufacturers and many small retailers, and an agent is used to help coordinate a large supply of the product. Dual Distribution – dual distribution describes a wide variety of marketing arrangements by which the manufacturer or wholesalers use smore than one channel simultaneously to reach the end user. They may sell directly to the end users as well as sell to other companies for resale. Using two or more channels to attract the same target market can sometime lead to channel conflict. An example of dual distribution is business format franchising where the franchisors license the operation of some of its units to franchisees while simultaneously owning and operating some units themselves.. Reverse Channels - If you've read about the other three channels, you would have noticed that they have one thing in common - the flow. Each one flows from producer to intermediary (if there is one) to consumer. Technology, however, has made another flow possible. This one goes in the reverse direction and may go - from consumer to intermediary to beneficiary. Think of making money from the resale of a product or recycling.

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