One of the things that confused us as a young company was
the topic of marketing and sales channels. While we did a pretty good job of
selling direct, everybody wanted to hear our plans for developing sales and
marketing channels. Having to explain why we don’t need any proved to be a good
school about the subject so here is a short explanation about each one of them
and when would you want to use them.
the topic of marketing and sales channels. While we did a pretty good job of
selling direct, everybody wanted to hear our plans for developing sales and
marketing channels. Having to explain why we don’t need any proved to be a good
school about the subject so here is a short explanation about each one of them
and when would you want to use them.
Referral – Paid
referrals are basically an outsourced marketing, somebody is passing your name
around for a fee and you are getting more leads. Referrals are also known as affiliation.
referrals are basically an outsourced marketing, somebody is passing your name
around for a fee and you are getting more leads. Referrals are also known as affiliation.
Reselling – this is basically outsourced sales. You are
still using your brand name so the marketing is on you but the reseller will
deal with the individual customers in the territories. Resellers are also known
as distributors - in the past the distributors also had a warehouse where the
resellers were more local and supported installations but the internet changed
that and today there is not much of a difference. Dell reselling Microsoft is
one example of this type of relationship.
still using your brand name so the marketing is on you but the reseller will
deal with the individual customers in the territories. Resellers are also known
as distributors - in the past the distributors also had a warehouse where the
resellers were more local and supported installations but the internet changed
that and today there is not much of a difference. Dell reselling Microsoft is
one example of this type of relationship.
OEMs – the abbreviation stands for Original Equipment
Manufacturer but confusingly enough it refers to a company who buys a product
and sales it under its own brand. In this case both the sales and the marketing
is outsourced. This practice is also referred to as white-labeling since the
original label is removed. If we continue the previous example, Dell is OEMing
Intel and is selling a Dell computer without specifying the exact type of chips
in it.
Manufacturer but confusingly enough it refers to a company who buys a product
and sales it under its own brand. In this case both the sales and the marketing
is outsourced. This practice is also referred to as white-labeling since the
original label is removed. If we continue the previous example, Dell is OEMing
Intel and is selling a Dell computer without specifying the exact type of chips
in it.
There are different reasons why companies choose a
distribution model. Some companies are looking to reduce the cost of acquisition
while other companies are looking to scale quickly and realize that customer
acquisition is becoming a bottle neck. Regardless of why you are looking to use
a distribution model, you need to ask yourself what is holding you back. Is it
the marketing? Is it the sales? Or is it both? Once you figure it out, you can
choose a model that outsources the part that is holding you back.
distribution model. Some companies are looking to reduce the cost of acquisition
while other companies are looking to scale quickly and realize that customer
acquisition is becoming a bottle neck. Regardless of why you are looking to use
a distribution model, you need to ask yourself what is holding you back. Is it
the marketing? Is it the sales? Or is it both? Once you figure it out, you can
choose a model that outsources the part that is holding you back.
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