Selling Direct Versus Indirect
Some vendors or manufacturers sell their products directly to their customers. Perhaps the most famous direct business model of all was that of Dell when it was founded by Michael Dell in 1984. Customer would go to the Dell website, configure their own PC and pay for it online. Then Dell would ship this personalised PC directly to the customer. There was no middle-man. No retailer, no wholesaler, no distributor. This was a pure, direct business model. Tesla is another example of a company which sells directly to its end customers. For these companies, the marketing process is relatively straight-forward. They need to reach out directly to potential customers with marketing messages designed to persuade them to buy their products.
Middle-Men: Collectively Known as “The Channel”
A lot of companies though, especially more mature companies, deploy an indirect business model. This means they sell their products or services through a network of resellers, possibly including retailers, distributors and wholesalers. These “middle-men” are collectively known as “the channel”. With this model the vendor or manufacturer typically supplies the product in question to a distributor or wholesaler, who in turn supplies the product to a network of resellers or retailers, and it is then they that finally sell the product to an end customer – be it a business or a consumer.
The Science Of Channel Marketing
Channel Marketing is the science of marketing products through the channel, i.e. through a network of resellers. It’s actually quite complex if you think about it. An indirect vendor has to support its distributors or wholesalers with marketing resources which enable them to reach out to resellers (and/or retailers) and persuade them to take stock of the product in question. The vendor also has to support those resellers that do take stock, in order to help them sell the product to end customers. That’s a very different type marketing – different audience, different messages. On top of that, the vendor will almost certainly need to work on its own marketing activities in order to generate demand with potential end customers.