Charting Your Sales Channel
How do you currently get your products or services to market? Direct via retail outlets, online via your website or do you, like thousands of B2B providers, use resellers? The standard online and face to face channels under your control can be reasonably easy for you to map out and understand. By applying the conversion rate achieved for each channel you use and then looking at the revenues and costs from each channel, you can soon work out how efficient they are and whether they are worth sticking with.
However, how can you do the same for your resellers? How do you find and manage those resellers in the first place and are you really getting the best from them?
Knowing which resellers to use and how to use them can give you a definite competitive advantage so it’s worth investing some time in doing this. By understanding how your product or service is best sold you can understand if resellers are a good option for you. If they are, you can identify which ones are best placed to help you depending on criteria such as sales volumes, similar services offered, if they work with competitors, how they sell (e.g. online websites, shops, reps) and what kind of training they need or already have. By working on this profile you can then go looking for other similar resellers that fit this profile.
Benefits of Using Resellers
Carefully choosing your resellers can help you to efficiently and cost effectively increase your customer base, improve your sales funnel and grow your bottom line. The benefits of using resellers include:
Provides a quick and simple way to expand your business to new areas; locally, nationally and even internationally without the associated costs normally involved in doing this.
Enables you to increase your brand awareness through resellers who will actively promote your business on your behalf, reducing your marketing costs.
Gives you the opportunity to enter new markets which may have been otherwise closed to you without significant marketing spend.
Gives you access to an additional sales force without the usual hassle and cost of employing and training them.
It’s a scalable solution. It’s relatively easy to add more resellers as the need arises and conversely, if you need to pull in the reins, you have the flexibility to do so.
Your existing sales force can concentrate on adding more value to existing clients whilst resellers bring in new business.
Management teams have more time to think about the ‘bigger picture’ rather than getting bogged down with managing sales people.
Of course there are disadvantages to using resellers and these will need to be traded off against the potential benefits.
How to Choose a Reseller
When choosing a reseller you need to find one that is a good match for your size of business and the type of industry you are in. This means doing your homework. Do some research about resellers in your industry, go to trade shows and networking events that resellers might attend and find out which ones would be a good fit for your business.
Once you’ve created a list of potential resellers you then need to examine their offering in more detail. Do they resell in your industry? Do they have experience in the target market that you’re aiming at?
What geography do they cover? Have they already got good relationships with your target audience? Do they currently work with your competitors? What kind of testimonials do they have?
These are all questions that you need to be asking in order to qualify their experience and ability to provide a reselling service for you.
Once you have collated the information you need you will understand if the reseller channel will be a cost effective option for you and compare it against other channels. Often you can survey a sample of resellers and extrapolate the results to give an estimate of the value of the channel to you.
A very quick useful equation for doing this is: Value = Estimated Reseller Sales Volumes x unit price (@ reseller rate)
If you can get some figures from a number of different resellers and work through this equation you will gain an understanding of the type of ROI you can expect and the size of the opportunity.
The advantages to mapping out your sales channels is that you can compare and contrast which ones are going to be the most profitable for you, and in doing so, save time, resource and money.
For more help or some example case studies on how GCL have helped their clients map their reseller channels contact us today.
