Question

Topic: Strategy

Manufacturer/wholesaler Selling Direct

Posted by Marketing Chick on 4/30/2013 at 2:51 AM ET 250 Points
Our biz has been a manufacturer and wholesaler of 100's of specialised, top-quality products for 20 years.

We are just looking at rolling out online shopping (selling direct) and a distributor log-in to order online and receive rewards (loyalty program).

The confusion has now started when we think of ways to not annoy the retailers;
1) include them in the sales process by having the customer buy online, but pick up from their local distributor and they receive a commission/rewards, OR
2) We don't include them at all in the process and give them a commission post sale
3)We don't include them and don't give them a commission - just sell products at RRP or higher as not to cannibalise them.

We also need to look at a strategy for rolling out the communication to the retailers. We are thinking of promoting the loyalty program at the same time to try to balance the blow and place it as a win-win situation.

Does anyone have any advice on the best way to include or not include the retailers in the process and any general tips?

Thanks
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RESPONSES

  • Posted on 4/30/2013 at 4:18 AM Accepted
    Do the retailers add value to your product? Are your products part of a broader offering for them? If so, you may be taking a big risk by going direct. You would be messing with their livelihood.

    So let's go to the REASON you are considering the direct sales approach: Why? What do you hope to accomplish? Is it a control thing? Greed? Does management believe the retailers are not doing a good enough job of representing your product?

    The answer to your question lies in understanding your ultimate objective and motivation.
  • Posted by Moriarty on 4/30/2013 at 6:06 AM Accepted
    As Mr Goodman says, what are the reasons for this new approach?

    What agreements have you with your current outlets? To be honest, I would speak to the ones you get on best with and just ask them what they think! After all, they may not do as good a job as you would online - in terms of reaching customers who need your products.
  • Posted on 4/30/2013 at 8:12 PM Accepted
    Why would a customer buy this product line online as opposed to buying at their local retailer? Price? Convenience?

    The retailers will not be happy that you're usurping their turf and they can decide to discontinue their relationship with you. If this is a product line that has the level of loyalty that people will seek it out on the internet, then it might be worth the risk.

    If it faces a lot of competition on the sales floor from competitors that can easily move customers away from your brand, I would seriously reconsider jeapordizing your retail channels by selling direct.

  • Posted by cookmarketing@gmail. on 4/30/2013 at 11:12 PM Accepted
    Offer a zip code location search...Buy Local...offers the ultimate voter - consumer - the option
  • Posted by arnabbanerjee385 on 5/7/2013 at 2:22 AM Accepted
    first strategy will annoy the buyers as they have to pick up from select location,which is not a wise decision.

    third one will annoy the retailers as they don't get commission, therefore goal cannot be achieved.

    only second one is a win/win strategy because both buyer and retailers are benefited. buyer can buy from anywhere which means flexibility and retailers get their commission..so this one is your desired strategy.
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