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Wholesale Distribution Channels

Six Wholesale Distribution Channels To Help You Get Started

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With your wholesale business, there isn’t one way, a right way, or even a best way of distributing your products. Different wholesales businesses have adapted one or more the methods below to successfully market their products where their peers failed before them. While some of the channels may lend themselves to your product better than others, the truth is you have to choose the best method for your own unique business.

Retail

Many companies prefer to focus on development and production of products, and leave the sales to the final consumer up to intermediaries. The most well-known of these are retailers - a store (or chain of stores) who specialize in reselling products. While you may sell to individual stores or a small association, many businesses try to market to “big box” retailers like Wal-Mart, Home Depot, J.C. Penny, etc.

Wholesale

Another type of intermediary is a wholesaler - a company who buys in bulk from companies such as yours and then resells the products through one of the channels listed here. The advantage for you is minimal involvement and less competition (say, as compared to selling to retailers). The wholesale buyer may combine or even perform basic assembly of your and your competitors’ products before reselling them.

Direct Mail

By directly marketing to consumers, you can generally charge higher margins and/or compete on price against retailers. However, this channel also necessitates fully functioning marketing and customer service departments. Examples of great companies who have successfully used direct mail as their distribution channel include L.L. Bean and Land’s End.

Telemarketing

Similar to direct mail, telemarketing involves selling directly to your final consumer. Unlike direct mail, this channel requires a much larger workforce specially trained to manage the unique challenges of telemarketing.

E-commerce

An alternative to direct mail and telemarketing is e-commerce - selling directly to final consumers through your website. Again, this direct sales channel requires a different skill set and marketing approach. While more passive than direct mail or telemarketing, it can also allow you to effectively serve niche markets previously too small for your marketing efforts.

Sales Force

While nearly every company will have some kind of sales team, this wholesale distribution method is where you don’t use intermediaries nor direct sales channels. Your sales efforts are entirely in the hands of salaried and/or commissioned individuals whose responsibility it is to sell your inventory. Auto dealerships are a classic example of this distribution method.

Again, there is no right or wrong way - only a way that best fits your company and your customers.

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