What is channel sales?

Sales channels refer to all commercial organizations and individuals that have obtained ownership of products transferred from producers to users. That is, the channel formed by connecting all stages of the product from the producer to the user. The starting point of the sales channel is the producer and the end point is the user. The intermediate links include wholesalers, retailers, and commercial service organizations (such as brokers and Trading Markets ).

Sales channels are only one of the most important assets of an enterprise and the most variable assets. It is the path through which enterprises transfer products to consumers. This path includes the company's own sales organization, agents, dealers, retail stores, etc. For a product, it does not increase the product itself, but adds additional value to the product through services. For enterprises, the sales channels play the role of logistics, capital flow, information flow, and business flow, it is difficult for the manufacturer to complete the tasks. Different industries, products, and enterprises have different forms of sales channels at different scales and stages of development. Most sales channels must go through the two links from dealers to retail stores. In order to meet the needs of retail stores and maximize profits, few dealers only represent one product, but have their own product combinations.

Over the past two years, super terminals represented by Beijing Gome, Shandong Sanlian, and Nanjing Suning have surfaced, and even made public announcements with industrial enterprises. Some Household Appliance Enterprises must make orders for super terminals, this is an unstoppable historical trend. Although super terminals are the focus of enterprises, domestic enterprises still face problems at the dealer level in marketing practice. Dealers are not only distributing one product. Enterprises want dealers to invest funds, personnel, networks, and other resources to expand their local market share, increase the local drive of your products. Some enterprises want to use some methods to control dealers, integrate with dealers into strategic alliances for joint development, and even some enterprises form joint ventures with dealers.

We know that dealers keep the market on one side, have enough social relationships, have a sound sales network, and have a sales team tested by the market. His short-term interest is to make money, and the long-term interest is to develop, with different goals and manufacturers. So what measures should enterprises rely on to "control" dealers? The following five methods may give you an answer.

I. Vision control:

As stated in the fifth practice, enterprise vision is a top priority for business leaders. An enterprise without a vision is an enterprise without a soul. It is only profitable and has no development prospects. Although the quality of domestic distributors is generally low, it is normal to have no long-term planning, but the manufacturers must have their own vision. Because every merchant has to consider the development of his own family, the market opportunities are limited. I am mainly engaged in the distribution of products of Company A, and it also means that I may give up the distribution of similar products of Company B. If Company A experienced operational problems a few years later, and Company B was very prosperous. Therefore, this dealer has paid a huge opportunity cost when choosing to go home.

Based on the dealer's consideration, on the one hand, enterprises must prove their excellence with market performance, and on the other hand, enterprises must constantly describe their bright prospects to dealers. What we call "spjecttling ". Dealers recognize your company's philosophy, the company's development strategy, and the company's main leaders. Even if the current policy is inappropriate, the dealers will not care about the problem of the product temporarily. The procedure is as follows:

1. Inspection and visit by the company's top management: directly enable the company's top management and dealers to communicate with each other, so that they can establish personal contact. Through high-level leadership to convey the company's development philosophy and prospects for the company's development prospects, such initiatives can allow dealers to gain a deeper understanding of the company's current situation and future development.

2. Internal publications of the Enterprise Office: enterprise leaders are published on a regular basis to address the market conditions in various regions. It is best to set up a distributor column to make dealers' opinions and suggestions part of the publication. Publish publications to dealers on a regular basis.

3. Dealer meeting: enterprises hold regular dealer meetings to praise and encourage dealers with good performance. Prior to the issuance of various policies of the company, a discussion meeting of dealers should be held. This gives dealers a sense of participation as a member of the company and feels that they are part of the company. Their development and development are inseparable.

2. Brand control:

The modern commercial society is a homogeneous product society, and the only characteristic of distinguishing products is the brand. Brands are the most important asset for many companies, so the boss of the Coca-Cola company dared to say: to burn all my factories, just give me the Coca-Cola brand, I will do the same as today's scale. Some brands, like McDonald's, Pepsi, and MTV, have already exists from products and become a culture, a value, and a religion.

From the perspective of channel management, product brands influence the entire channel through the influence on consumers. As a distributor, you also need to set up your own brand, but the dealer's brand can only play a role in the channel and has little effect on consumers. The dealer's brand is usually attached to the brand of the main products on behalf of the dealer. without support from the manufacturer, the dealer's brand value will be greatly reduced.

For dealers, what is the role of a brand's product? It is profit, sales, and image, but the most important thing is the sales efficiency. Generally, the price of the best-selling products is transparent, and competition is fierce, not the main source of enterprise profits. However, the marketing of the best-selling products is relatively small, so the sales cost of the dealers is relatively small, which will drive the sales of other products. In this way, we can find the profit from other products, and increase the turnover rate of dealers' funds because of the fast sales speed.

Therefore, as long as an enterprise establishes its own good brand image at the consumer level, it can exert an influence on the channel. This brand reduces the sales cost for dealers, increases the sales efficiency, and controls the sales channels.

3. Service Control:

In general, the management capability of dealers is weaker than that of enterprises, and the personnel quality of dealers is worse than that of enterprises. The company has professional financial staff, sales staff, management staff and marketing staff. Most dealers may be relatives or friends. Many dealers are eager to receive professional guidance on management, marketing, and human resources after a certain period of development, there are some professors or professional consulting companies who want to help them improve their management level. In the end, they often find that they cannot meet their real needs and meet their expectations, the cost is also relatively high.

The consultative sales advocated in modern marketing can be specifically used to solve this problem. The so-called consultative sales means that the sales representatives of enterprises not only sell products to dealers, but also help dealers to sell, improve sales efficiency, reduce sales costs, and increase sales profits. That is to say, the sales representative gives the dealer a solution. This solution can solve the dealer's current profit problem and his long-term profit problem.

Daily sales of enterprises are carried out on a fixed platform. Many enterprises have already achieved "sales Automation", and business assistants can complete their daily sales work. If the sales representatives focus on improving their own level, they will continue to charge their enterprises, and conduct different training courses based on the dealer's needs to train the dealer's business personnel and management personnel. In this way, the capability of sales representatives can be improved, the professionalism of dealer personnel can be improved, and knowledge exchange between dealers can be promoted to improve the overall level of dealers.

In the implementation of such a solution, the enterprise acts as a teacher, the dealer acts as a student, and the dealer operates according to the teacher's ideas, enterprises control dealers in terms of ideas. Such a teacher-student relationship cannot be broken. Will there be a "rebellion problem" in such a channel? For enterprises, training dealers helps dealers to strengthen management. Such investment is much less than marketing investment.

Iv. Terminal Control:

One of the most widely used methods in the consumer goods industry is to directly control the terminal and the next home of dealers .. There are some enterprises that follow the market, that is, find the right dealers in the local area, and gradually master the dealers and local retail stores in the process of helping dealers do their business. There are also some enterprises that are focusing on the market, that is, the company does not find a suitable dealer, or the company does not find a dealer. The company thinks that the market is the most important, and the market should be done first and then the channel should be done. Enterprises directly engage in business relationships with local retail stores. Through direct sales promotion activities at retail stores, the entire market has become popular. At this time, the initiative lies in the hands of enterprises, and then selects appropriate dealers to manage the market through investment promotion to complete channel construction.

No matter which method, controlling retail stores is the most fundamental purpose. retail stores should first identify products, brands, and manufacturers, rather than dealers, the manufacturer is sure to switch the retail store to a new channel without affecting the sales volume when the dealer encounters a problem. There are several specific methods:

1. create basic archives: Create a geographical chart for the distribution of retail stores, create a retail store profile, create a profile for the main store staff, create a file for competitors, and create a distributor profile, create the basic information file of the manufacturer. These archives should be updated frequently during regular meetings to ensure the accuracy and integrity of basic materials.

2. Establish a membership system for retail stores: some enterprises have established a membership system for retail stores and hold regular activities to increase contact between retail stores and manufacturers. Motorola not only has a retail store membership system, it even has established a membership system for Retail Store Shop Assistants, regularly hold member participation activities, and reward points based on the number of cell phones sold by shop assistants.

3. promotion activities: enterprises should implement the promotion activities on the terminal, and even hold the activities of shop assistant rewards and retail store incentives. Only in this way can the promotion result be the most effective, only when such activities are carried out can terminal and enterprise feelings be enhanced. Enhance the influence of corporate brands.

4. Training Clerk: the clerk in a retail store plays the largest role in sales. The fate of a product with better performance and price ratio can be imagined if the clerk does not actively recommend the product or even crack down on it. The training of shop assistants can increase her recognition of the company and the product. It helps the clerk fully understand the product performance and indicators and increase sales skills.

The above is just a few ways to control the terminal. The most fundamental thing is to have a good archive, that is, the basic database of the local market conditions. On the basis of this database, we should carry out visits to terminals and hold various activities on direct terminals.

V. Interest control:

The above method can be said to be to control dealers in terms of service and to consider long-term cooperation with dealers. However, every seller must protect its interests, especially short-term ones. How much is this short-term benefit to dealers? We often hear sales representatives like this and the company have to make a policy: Give more rebates and a good price. If we don't give it, customers won't do it with us. Is that true? If the dealer doesn't do anything with us, he is still running other products. The dealer's variable fees will not be much reduced in the short term, and the rental and other fixed fees will happen, and the depreciation will happen. If the profit of cooperation is lost, the overall profit will be reduced, and the cost will not be reduced much. That is to say, he is likely to lose money. In this way, the conversion risk is too great, and he is unwilling to take it. At this time, we will fully respect the opinions of enterprises. That is, enterprises control dealers.

So when is the dealer's risk small? If an enterprise makes a small profit for its dealers and does not cooperate with the enterprise, it will make a profit. Therefore, such a cooperative relationship does not matter to dealers, so enterprises do not control dealers. Therefore, the control of dealers should control the above services and interests, so that sufficient benefits should be given to dealers. In other words, the profits that enterprises give to dealers are greater than the profits of dealers. Only at this time can dealers feel pain when they "Break up" with the company. The only thing the company can say is to control the dealer. There are five specific methods:

1. Increase Your rebates and discounts so that you can increase the profits of your dealers.

2. Increase sales of your own products.

3. Reduce sales of other products of dealers.

4. Reduce the profit of other products of dealers

5. Increase dealer fees

The above five methods are adopted by general enterprises. Through continuous promotion activities and channel incentives, sales volume and unit profit are stimulated. The essence of the two methods in the middle is to combat competitors' products and reduce their sales and profits. The fifth approach is to make great losses to dealers. It is best not to use it, because the value of the channel is that it can be distributed at a low cost. If the dealer's fees are too high, it is unreasonable to exist, it makes no sense to lose control.

The above analysis is just a perceptual knowledge, and it is not convenient to measure the way, the sales representative is the most contact with the specific sales volume, rather than the profit. The following uses quantitative methods to indicate that "the profit given to dealers is greater than the profit of dealers ". Assume that the overall sales volume of the dealer is Y, the sales volume of the manufacturer is X, the unit profit of other products is T2, the unit profit of the product is T1, and the customer's pure interest rate is M.

Manufacturers control the dealer formula is: x * T1 "m [x * t1 + (Y-X) * t2].

Change the formula to: x/y, 1/[(1-m) * t1/T2 + 1]

From the above formula, we know the proportion of the sales volume of an enterprise to the total sales volume of a dealer can control the customer. For example, in the mobile phone industry, the unit gross profit of other products is t2 = 20 yuan, the manufacturer's unit gross profit is T1 = 20 yuan, and the dealer's pure interest rate is M = 1/3, then x/y = 66%, that is, if the manufacturer wants to control the dealer, his sales volume accounts for 66% of the dealer's sales volume.

The above formula is just a rough estimate, and the actual business operation is not that simple. Every rational merchant or manufacturer must think twice during channel conversion. When switching dealers, the manufacturer has already selected alternate customers. When the seller switched the manufacturer, he had already selected a new mother-in-law. There were very few sudden switching signs. However, the above formula x/y is the direction of every sales representative's efforts.

If an enterprise has established a broad vision and recognized by dealers, if it has established a good brand image in the consumer's mind, if the enterprise has developed a Customer Consultant Team and truly serves the enterprise; if the enterprise controls the terminal and establishes good communication with the terminal, if the enterprise can bring the interest that the dealer cannot refuse. The future of this enterprise is ambitious. In this way, the first-class channel formed by controlling dealers can grasp the development of the industry, realize the true network as the king, and establish the demeanor of industry leaders.