Why and when an organisation takes a call to promote sales through channel network?

The most important objective for any distribution channel is to make the product conveniently available for customers who want to buy it.
Product availability is an important objective for all distribution channels.
The appropriate degree of availability varies with the characteristics of the product and the target customers, particularly the product’s importance to those customers and the amount of time and effort they will expend to obtain it.
Consequently, the reasons that makes a company promote sales through distribution channels could be summed up as follows:
1- develop a push strategy for the organization product to make it available to a wider range of customers.
2- Minimizing the cost of distributing products and/or opening retails to reach wider geographical areas.
3- take advantage of the distribution channel's existing customers database.
4- Achieve a wider awareness strategy about the organization's products.

There are many reasons for a company to go the channel way 

Tthe sales /Marketing team see the below advantages ---

1] Make entry easier to the marketr easier and would also add credibility to the product if the partner is good 

2] Instant Market reach 

3] Product bundling becomes easier 

4] Desired Merchandising and marketing  activites can be achived with out wasting company resource on the same 

5] Increased Feet on Street 

 

The Management will see the below advantages 

$ Government regulations will be handled by your partner 

$ Single point Billing 

$ Money is Safe - Donot have to spend company resources on the same 

$ Expense on SCM operatiions costscan be reduced 

 

When the company starts looking for the above advantages .It can think of channel 

The organisations normally choose to go for sales through channel partners network when the country they want to sell is politically unstable, organisation is small / medium size or at start up stage or when business size is small or when product range is not large enough to sustain the costs of company owned sales depots / stores or they deal in products which do not require specialized after sales services.

There are many arguments in favor of Channel Sales compared to Direct Sales and otherwise also. However, a Company may opt for Sales through Channel with following top4 Objectives:

1. Volume & Customer Relationship: Higher Volumes are better managed through a Channel, CRM is more effective and focussed when done through Channel. Dealer Network also helps in cultivating territories and bringing additional business

2. Reduction In Sales Infrastructure: With Channel, the company's cost of sales infrastructure in terms of Sales force, Stockyards etc can be Optimized

3. Reach: A Channel network is the best way to increase your company's reach. You can have more feet on ground without worrying about managing a huge Sales Force. A Channel also provides impetus to BTL Marketing activities

4. Customer Service: With increased reach the customer service is bound to increase and hence customer satisfaction and retention