Posted in Marketing and Strategy Terms, Total Reads: 1711
Definition: Indirect Sales
A channel of Sales which involves selling through third party sellers like speciality stores and retailers, rather than through the company’s own sales force. Indirect selling is used in combination with its direct selling efforts or in case when it wants to avoid hiring people for sales function.
One of the benefits of indirect selling is that it allows selling more without having to hire additional sales personnel. However indirect selling invites problems like losing of control over brand image as the company does not have a direct control over the retailers or the speciality stores.
Need for indirect selling:
1. when the demand of the product is more than the hiring pace of the company
2. when the price of the product is too low to justify new hiring
3. When there is an efficient channel of indirect selling available in the market which can be leveraged to our advantage.
Some arguments against indirect selling are as follows:
• Direct control over the quality and consumer service is lost
• A lot of time is spent to undo the problems created by the retailers and thus leads to unwanted costs
• Business’s goals and objectives are not communicated as successfully as intended to the final customer.
• Certain part of the profits are eaten away in the distribution network in the form of margins and fees.