Direct sales vs distributor sales

While direct sales means that you sell products or services directly to customers, distributor sales is a model where you use intermediaries. Here, distributors or partners are responsible for getting your products out to resellers, retailers or end-customers, while you are responsible for making sure they can do so effectively.

So, if you have to choose between direct sales vs distibutor sales, what should you do? And how do you solve the challenges that come with the indirect model? Below, we’ve gathered everything you need to know.

Direct sales vs Distributor sales: the differences

1. Distributor sales means a lack of control

• Direct Sales: With direct sales, you have total control over the sales process, of customer interactions and branding. You yorself create and maintain a relationship with the end-customer, and you yourself can ensure that the customer experience is consistent.
• Distributor Sales: Distributor sales, on the other hand, means that you rely on third-party distributors to sell your products. This also means that the sales process is further away from you and that the customer relationship exists between your end-customer and your distibutor. Something that can oftentimes weaken said relationship, if the distributor lacks the necessary tools, training and service.

2. Distributor sales can give you a wider reach

• Direct Sales: Direct sales is usually limited to the area where you have a physical presence, where you have boots on the ground and a team in place.
• Distributor Sales: Meanwhile, distributor sales allows you to reach a wider geographical area, and go deep into new markets quickly. This, since you can utilize a distributor’s pre-existing network to tap markets and areas where you yourself might not have a presence.

3. Distributor sales can cost less upfront

• Direct Sales: Direct sales often involves higher upfront costs for hiring and training a sales team, as well as establishing marketing and distribution channels. Just imagine the cost of putting a new team in a new market, onboarding everyone, setting up an office etc.
• Distributor Sales: This cost can be substantially lower with distributor sales, since these things tend to exist already. On top of that the distributor will usually bear some of the costs that come with sales and distribution.

The biggest challenges for distributor sales

Now, direct sales have challenges for sure, but said challenges are usually much more prominent when distributors are involved. Why? Well, a lot has to do with the above-mentioned lack of control, a sales force that is spread across different organizations and the difficulties to maintain a consistent communication with everyone.

Below, you’ll find a number of challenges that are usually prominent for distributor-sales companies, as well as solutions to the same:

1. Enabling Distributors

• Challenge: Distributors can struggle to effectively sell products if they don’t have access to the right marketing materials, product information, or sales tools. This can be mean that they lose sales momentum, that you lose mindshare and ultimately sell less products than you want to. Solution: Give distributors access to the material they need – and the tools they need to share said material effectively. If you can also make sure that distributors get access to the exact material they need and don’t have to spend time sorting through an enormous, global, digital folder, they can have an even easier time finding what they’re looking for – right when they need it the most.
• Challenge: Making sure that distributors are trained, that they understand your product and are equipped with the latest product updates and marketing collateral can be huge challenge. Solution: Find a content-sharing tool with a robust version control in place. Good content-sharing tools allow you to update material in one place – and have it be reflected wherever the material is used. This won’t just help you make sure that distributors use the right content version, but it will also help you save an enormous amount of time and headache.

2. Engaging Distributors

• Challenge: Distributors typically represent multiple brands, which can make it a challenge to stand out and capture their attention. Solution: Create an outstanding distributor experience, make it easy to work with your products and material and notify distributors when new material or products are available.
• Challenge: Maintaining a continuous communication and engaging distributors between visits are both crucial for success. Distributors have to keep you and your products in mind and need swift answers to the questions they have. This can be particularly challenging if you and your team rely on emails to communicate with distributors – which doesn’t just take a lot of time and resources, but is also risky. An email may disappear in an inbox and, just like that, a question from a key distributor is left unanswered. Something that can mean that a sale is lost or that their momentum is halted. Solution: Create a direct line of communication between you and distributors; a line of communication that is not relying on emails and where you can be notified when new questions come in.

3. Managing and Onboarding Distributors

• Challenge: Onboarding new distributors is super important. It also tends to take significant time and resources, especially as you need to provide training and make sure that the distributor can effectively communicate just how great your product is. Solution: If you implement a tool like a Partner Portal (and make sure it has the functionality you need), you can seamlessly onboard new distributors with the same tool you’ll use when they’re up and running. This will make for a smooth process that sets a foundation for a strong engament and a long-standing relation.
• Challenge: Managing a network of distributors across a ton of regions can be complex, to say the least. It tends to require an effective communication, coordination and support to make sure distibutors perform and always represent your brand perfectly. Solution: Create a control center from where you can manage all distributors from one place and never lose sight of a single one. This might be a Partner Portal of some kind, or other forms of partner-management software.

Direct sales vs Distributor Sales: can distributor sales be as easy as direct sales?

While direct sales might be easier to control from the start, distributor sales gives you a chance to move into new markets quickly and expand your reach without a hefty start-up cost. And it doesn’t even have to be difficult or challenging. In fact, the right strategies and tools can make it easy to manage, enable and engage all your distributors, while maintaining an even bigger control than the one you have over your own sales force.

This is something that we at SP_CE are dead sure of. We want to make your distributor-sales machine work smoother than ever, and have created our Partner Portal for this exact purpose. It can let you manage all distributors from one place and give each and everyone a unique portal where they can ask questions, learn about your product – and find material that is always updated to their latest versions. All while you can escape the hassle of emailing back and forth, control exactly what material is shared with end-customers and save an enormous amount of time.