Routes to market
Your route to market is how you you sell your product and how
you plan your sales. It's one of the most important things to
get right: if you don't sell the way your customers want, they
won't buy your product. This guide introduces you to the
different routes to market.
- What to consider before you choose
- Direct selling
- Selling wholesale
- Distance selling
- Online selling
- Combination of channels
1) What to consider before you choose
Your route to market needs to be suited to your customers - to
how they shop, where they shop and where they'll see your
product. It also needs to match your budget and your ability
to distribute your product. If your route requires product
delivery, for example, look at how much it'll cost as well as if
you can realistically manage the speed and reliability you want to
promise customers - and the logistics.
- Consider how and where your customers shop
- Keep in mind your budget and your ability to manage your chosen
route
2) Direct sales
Direct selling is where you sell your product straight to the
customer, without a middle man - through your own website,
door-to-door, using direct marketing or advertising, or through
your own shop. It's good for when you need to explain complex
products to consumers. It lets you use your selling skills,
build a personal relationship with the customer and get direct
feedback. But it requires more staff and higher travel
costs. It's usually more suited to complex products and
packages and making personal contact with an important customer for
the first time.
- Good for complex products
- Good for making personal contact with an important
customer
- More expensive and time consuming
3) Selling wholesale
You sell your product to a retailer, wholesaler or reseller, who
then sells it on to consumers. You usually sell a fairly
large amount of product at a lower rate than if you were selling
direct. It's a cost-effective way to shift lots of product in
one go, and it doesn't use up the resources you need approaching
customers individually yourself. It's often more
straight-forward to manage business with one wholesaler than lots
of individual consumers. However, profit margins are often
reduced, and it can be complicated setting price and finding the
right wholesaler. It's the preferred route to market for
selling lower value items, shifting a lot of product quickly and
selling to businesses who prefer to deal with large or established
suppliers.
- Good for selling lower value items and shifting a lot
quickly
- Lower profit margins and some complications
4) Distance sales
This is where you sell to customers remotely - usually through a
website, telesales or direct mail such as catalogues and
brochures. It's much cheaper than renting retail space and
you don't have to travel to customers, saving time and money.
Cons are that you can't properly demonstrate your product - some
people prefer to feel and try out a product before they purchase -
and trust can be more difficult to establish online. It's a
good selling method for repeat orders, reaching internet markets
and selling to customers who are further away or abroad, or for
products and services that don't need to be touched and tried out
to be trusted.
- Much cheaper than most other routes
- But harder to build trust in product and business
- Good for repeat orders and products that don't need
demonstration
5) Online sales
There are different ways to sell your product online - such as
through your own website, by using affiliate marketing, through an
auction site such as Ebay, through a retailer's website, through
online adverts, or using direct emailing to a customer
database. Selling online saves on costs - no shop premises or
staff needed and orders can be placed automatically. It also
means that your business can be open 24/7, that it may reach a
wider customer base, and that you can collect data from people
placing orders. However, the internet is often seen as less
personal and less trustworthy, you can't demonstrate the product,
and it can be difficult to get traffic to come to your site.
To make the most of online, you need a really reliable and
easy-to-use website.
- Saves on costs and keeps business open 24/7
- May reach a wider audience
- Difficulties establishing trust and drawing in traffic
- Get a reliable and straight-forward website
6) Combining channels
This does exactly what it says on the tin - you use more than
one route to market. This can give you a greater chance of
reaching your audience, and you can work out which channel is most
effective and adjust your sales strategy accordingly. Be
aware, though, that you need to keep on top of each channel -
prices must be kept consistent if there's a chance someone's going
to see more than one channel. You also need to make sure you
don't step on any of your agents' toes by using another channel on
top of theirs.
- Can give a greater chance of reaching audience
- Helps develop sales strategy
- Difficulties managing multiple channels
Smarta Business Builder
To help you on your business journey, we've created Smarta Business Builder, the complete online
tools package for growing your business. Website
Builder, Business
Plans, Accounting
Software, Legal
Documents and Email - all in one place
- from just £20 per month with no contract! Try it out today.