Jul 22, 2017

DISTRIBUTORS CHANNEL (INDUSTRIAL GOODS)


This is very simple to understand about the distributors channel for manufactured industrial goods for salespeople. Few important of them are:

Manufacturer to Industrial user

Manufacturer to Merchant Wholesales to Industrial user

Manufacturer through Agent-Middlemen to Industrial user

Manufacturer through Agent-Middlemen to Merchant Wholesaler to Industrial user

MANUFACTURER TO INDUSTRIAL USER CHANNEL: This is the most direct channel of distribution, industrial goods like locomotives, generators, boilers and turbines, heavy machineries, blast furnaces etc., are usually sold directly by the sellers to the industrial users. There are certain reasons for such a direct sale or supply. Firstly, the volume and value of individual purchases are large enough. Secondly, the buyers are limited and are located in concentrated areas. Thirdly, provision of technical service makes it quite essential for the seller to sell or supply his goods directly to industrial users. Fourthly, the seller usually establishes certain service and repairs centers at different places. To get these service facilities, the industrial user has to purchase them directly from the producers of industrial goods. Fifthly, in case of reciprocal trading, direct selling becomes beneficial. Finally, industrial users prefer to purchase these goods directly from the producers, because they are able to keep constant touch and communication with them and able provide technical and commercial service frequently.

But there are certain difficulties in the direct sale method. For example, the producer of industrial goods has to open service and repair stations at different places convenient to users. For this purpose, he has employed large personnel, which may become expensive. Moreover, he has to control and supervise various salespeople working under him. This involves a great managerial capacity. Thus, direct selling requires huge amount of capital and high degree of managerial ability. Therefore direct selling is possible only for big manufacturers/producers with huge financial resources and managerial staff.

MANUFACTURER TO MERCHANT WHOLESALER TO INDUSTRIAL USER:

Marketing of industrial goods like operating supplies and small equipment such as building materials, labor saving devices, tools, small motors, stationary articles etc., is usually done through the middlemen. The most common middlemen are the wholesalers who are available to the industrial users quickly. Click here for more Why we need Distributors?

MANUFACTURER TO AGENT TO INDUSTRIAL USERS:

Sometime the manufacturer of industrial goods appoints his own agent to act as middlemen for marketing his products. This is the case the manufacturer feels his inability to undertake marketing activities or open branches or sales offices. An agent middleman is usually appointed by a manufacturer who has newly entered the market and who does not the marketing methods. The agent sells the goods on behalf of the manufacturer to the industrial users.

MANUFACTURER TO AGENT TO WHOLESALER TO INDUSTRIAL USER:

In this case, the agent sells the goods of his principal to the wholesalers and not to the industrial users directly. The wholesalers sell them directly to the industrial users. In this case, the wholesalers make provision for the storage of the goods so as to provide a regular supply.

It should be noted that the agent who will be appointed by the manufacturer may be a commission agent, selling agent or a broker. They differ in differ in dealings from one another.

In the marketing of the most of the manufacturer industrial goods, direct sale method is very common. In the case of some manufactured industrial goods, their sale is affected through the middlemen or distributors. This is the case when the industrial users are small businessmen and their purchases are usually in small quantities. Sometimes even large industrial users also prefer to purchase through the middlemen only those goods which they require in small quantities. Finally the producers of industrial goods use both the methods of sale viz., direct sale and sale through the middlemen. They tend to sell/supply directly when the order is sufficiently large or when the buyers are concentrated in a certain regions. They tend to sell through the middlemen when the orders are small and when the buyers are scattered over a wide region.













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