Should we appoint a distributor, or have out own sales force?
The answer to this largely depends upon the circumstances of the company, and your most effective routes to market. Your Enterprise Hub team will be able to help you with deciding what your best sales strategies are likely to be, and the right sales channels for your products.
However, there are some general points to be made when considering distributors:
Pros
- Lower overheads – a sales force costs money to recruit, train and maintain. With distributors you don’t have these costs.
- Using a network of distributors can be a cost-effective way of reaching markets that a dedicated sales force could not penetrate. Distributors may also have complementary products that will sit comfortably next to yours.
- Some markets, especially geographical or specialist, are difficult to break into without existing contacts and experience. It can be very expensive to hire this on an employee basis.
Cons
- It can be difficult to control your distributor’s activities and make sure they are working for your interests. They will have many clients, some of whom may have products that compete with yours. Try to make sure you have an exclusive agreement with your distributor.
- If you have a complex product, an in-house salesperson might understand it better.
- Again, you have little control over how your distributor sells your product, if you don’t like how they do the job your only option is to find a new distributor.
There are many different routes to market, and this is just one. Choosing the right route (or routes) to market will make a material difference to your chances of success. Contact your local Enterprise Hub for advice on which strategy will suit you.
Contact
Medway Enterprise Hub
