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Indirect Sales

The needs of start up companies are vast.  They include access to technology, professional support, publicity  and everything in between.  However making sales is a small company’s most critical requirement.  One way to generate cost effective sales is to take advantage of indirect sales.  In other words have other people do the selling for you. Below I will discuss five examples of indirect sales.

Affinity:  If you have ever received a mailer from your college alma mater or an industry association, of which you are a member, offering a special discount on a new credit card offer then you have seen affinity marketing.  This is a relationship where a company such as the credit card company will partner with another company or organization that has existing customer or member relationships.  The credit card company pays a referral fee to the organization for any new customers generated through the mailing.

Affiliate Partnership:  This is nearly identical to an affinity partner, except this is the term typically used when commissions are paid through sales from clicking links online.  Some fees are based on the click, while others are based on the purchases made on the affiliate’s website.

Independent Manufacturers Representative:  Most manufactured products sectors have entire fields of manufacturer’s representatives, which are either individuals or professional companies with corporate structures.  These people or companies represent product lines made by other companies.  As experts in their respective fields who have strong relationships with the salespeople in their industry, they get compensated on what they sell.  They sell products to customers such as retail stores.  However the manufacturer still invoices the customer and pays commission to the manufacturer’s representative.  Pretty much all industries have an association that represents it.  These associations can be very useful in gaining knowledge about the industry.  Through an association you can often find manufacturers that service that industry.

Distributors:  Like independent manufacturer’s representative a distributor is a company that sells products produced by another company.  The big difference is that the distributor takes on more financial risk, and also requires a larger compensation.  A distributor will buy products directly from the manufacturer and stock the inventory at their warehouse. They sell and ship to the customer and invoice the customer.  Due to the increased risk and services by distributors they do generally require a greater wholesale discount so that they can sell to their customers and still make a profit.

Value Added Reseller:  Similar to the manufacturer’s representative, mentioned above, value added resellers are experts in their field, usually technology, and they provide services to their customers.  Value added resellers need a menu of products and services they can provide beyond their own services. They will be given a wholesale price and they will sell to the customer at the sale price.
Most business owners are the best salespeople for their own products or services.  That is how a company’s first sales are usually made.  Indirect sales can help a small company grow much more rapidly.  Finding these companies can be challenging.  As with most information about your marketing the best source can be your current target customer.  You can ask them who they think are the best organizations, manufacturer’s representatives, distributors or resellers.