Define your product distribution strategy for a new market recognizing the most suitable sales channels
When starting to sell products overseas, we should consider which is the best and most effective way to reach the target customer. So, we should decide which is the most suitable sales channel for our business taking into account the product characteristics and the current sales structure.
Indeed, we should consider that, even for the same sector, the sales channels’ organization is different for each country. That means we will have to work up a sales strategy for every single market we want to enter. Nevertheless, we can structure the possible channels as follows:
Direct sales channels
Direct sales, as the name suggests, involves selling the products directly to the customer. That is, it happens when the consumer buys the product directly to the manufacturer. Generally, we can distinguish between “Face-to-face” direct sales, where the seller meets the client in person, and on the other hand, it also exists the distance selling, which means selling by phone, email or webpage. So, in this case there is no direct encountering between the seller and the client.
Face-to-face sometimes requires a high investment as it implies traveling and having trained staff. But it is very useful when selling complex products or when you want to build a personal relationship with the client.
On the contrary, distance selling could be considered as a second step once the relationship with the client is strengthened. Employing it as a first step, it is commonly used for products that are easily sold online, for example, consumer goods.
Indirect sales channels
Secondly, indirect selling implies dealing with an intermediary who will be our distribution channel. The main purpose of this system is to bridge the gap between the producer and the future client without the need for high investment and having a partner who will help us to remove trade barriers.
By and large, we can talk about distributors and agents acting as intermediaries. The choice between these profiles is based on several facts, but it has much to do with the level of involvement of the intermediary: it can range from an agent who would just promote our products, to a distributor who will buy and sell our product, as well as storing and giving post-purchase service and maintenance, in case it is required.
All in all, when choosing the most suitable sales channel we should take into account several product features such as nature and price, as well as the reputation of the potential partner. We need, however, to bear in mind that there is no single formula for choosing the right option. We just have to consider the pros and cons of every alternative as this decision can impact our organization’s brand and positioning on the new potential market.
And what about you. Are you aware of the most suitable sales channel for your product and business when entering the Spanish market?
At Ferrer-Dalmau we can help you preparing a successful entry into the Spanish market. We act as distributors & agents, so we can advise you on the best option for each case. You can contact us through this link.