Indirect Sales
Indirect sales are the sale of a good or service by a third-party, such as a partner or affiliate, rather than a company's personnel. Indirect sales may be used in conjunction with a company's direct sales efforts or may be used in lieu of hiring sales staff. Indirect sales can allow a company to increase sales quickly without having to hire more sales personnel. Companies often resort to indirect sales when the demand for the product is outpacing the ability of the company to hire competent salespeople, or when the price of the product is too low to justify a large sales force. Indirect sales may be contrasted with direct sales, in which consumers purchase directly from the manufacturer.
What Are Indirect Sales?
Indirect sales are the sale of a good or service by a third-party, such as a partner or affiliate, rather than a company's personnel. Indirect sales may be used in conjunction with a company's direct sales efforts or may be used in lieu of hiring sales staff. Indirect sales are often made through resellers, such as specialty stores and big-box retailers.
Indirect sales may be contrasted with direct sales, in which consumers purchase directly from the manufacturer.
How Indirect Sales Work
Indirect sales can allow a company to increase sales quickly without having to hire more sales personnel. Companies often resort to indirect sales when the demand for the product is outpacing the ability of the company to hire competent salespeople, or when the price of the product is too low to justify a large sales force. Utilizing an indirect sales strategy is also efficient in that it allows the cost associated with a sale to be in proportion to how much success a reseller is.
Indirect sales strategies do have a few downsides, however. For one, added fees can cut into margins. And in some cases, the use of affiliates or resellers may lead to reduced control of the brand message and compromised customer service. Because companies cannot manage indirect sales teams as easily as if they were in-house any problems that may arise from the use of third-party sellers can be difficult and costly to remedy. Companies using indirect sales may also have a harder time communicating their goals and objectives to the customer.
Indirect Sales Strategies
There are several channels for building an indirect sales network. They include:
Related terms:
Affiliate Marketing
Affiliate marketing allows you to earn commissions for marketing another company's products or services. read more
Affiliate Network
An affiliate network is a group of companies that sometimes offer compatible or complementary products and will often pass leads to each other. read more
Affiliate
The term affiliate is used to describe the relationship between two entities wherein one company owns less than a majority stake in the other's stock. read more
Business-to-Business (B2B) & Example
Business to business is a type of commerce transaction that exists between businesses, such as those involving a manufacturer and wholesaler or retailer. read more
Customer Service
Customer service is the direct one-on-one interaction between a consumer making a purchase and a representative of the company that is selling it. read more
Disintermediation
Disintermediation is the removal of a middleman in the supply chain to allow producers to sell directly to their customers. read more
Merchandising
Merchandising is any act of promoting goods or services for retail sale, including marketing strategies, display design, and discount offers. read more
Mergers and Acquisitions (M&A)
Mergers and acquisitions (M&A) refers to the consolidation of companies or assets through various types of financial transactions. read more
Middleman
An intermediary in a business or financial transaction or process chain is commonly referred to as a middleman. read more
Original Equipment Manufacturer (OEM)
An original equipment manufacturer (OEM) provides the components in another company's product, working closely with the seller of the finished product. read more