The internet has changed the way we think about and conduct business in every conceivable way. Physical businesses and retailers experience declining traffic, year after year. Competition continues to grow stricter and more severe as more and more businesses move online, as well.
While the shift to digital commerce has raised the stakes for businesses looking to remain competitive in the digital marketplace, it's also created an entire universe of new opportunities for the savvy digital marketer.
Enter the channel sales model.
Channel sales have been around for almost as long as humans have been selling things. The simple answer to the question "What is channel sales?" is "any time the buyer or seller of a product is different than the manufacturer or service provider."
When you look at the question through this wide-angle lens, you'll quickly realize this sales channel definition speaks to a wide array of different business models and strategies common to the internet.
Types Of Sales Channels Include:
Already, you should be starting to get a more clear idea of the sales channel landscape. You might already be starting to have ideas about the benefits of a channel sales strategy. You might also begin to imagine some of the potential challenges.
The channel sales model essentially has two components. First, there's the provider. Then there's the retailer.
How you go about implementing channel sales yourself depends on where you fall on that equation. We'll consider solutions from both sides of the equation, so there's something for everybody looking to get into channel sales.
As the list of different forms of channel sales above illustrates, many of the most popular forms of online retail and commerce takes advantage of the format. Why are channel sales so popular?
The channel sales format offers an opportunity for new retailers and online merchants to break into business without having to outlay a ton of cash.Â
Consider the affiliate market, for instance. Interest in affiliate marketing has at least doubled in the last five years. Why is that?
Affiliate marketing is a way for someone to get started in online business for as little money as possible. Sometimes it can even be completely free. Someone having an idea, starting a blog, gaining some popularity, and leveraging that popularity to earn an income has become a business model in-and-of-itself.
For manufacturers, marketers, and service providers, affiliate marketing speaks to a different need. With each passing year, consumers become more resistant towards traditional marketing. Business owners need to get creative to reach their potential customer base.
This can sometimes be very expensive.
An affiliate marketing setup means that they're able to take advantage of word-of-mouth recommendations. People are far more likely to take recommendations from a friend or relative than some advertisement. Generating sales through these word-of-mouth recommendations often costs far less than it would to run a print ad, for example.
Channel sales are able to be grown as you expand. You don't have to have your business fully developed to take advantage of a channel sales setup. Instead, it's more of an infrastructure that sets you up for success.
For the manufacturers and service providers looking to grow your brand with channel marketing, the scalability goes without saying. You simply need to keep adding affiliates to your network. They'll continue to grow your brand for you!
Channel sales is one business model where you don't even need your own real estate, whether physical or digital, to get started in business. Many small business owners and entrepreneurs use the channel sales model to get started in business. They might begin as a reseller and start a storefront on an online marketplace like eBay, Etsy, Amazon, or Shopify for instance.
Starting out with a channel sales format on an online marketplace is a good chance to practice business techniques to see what works and what doesn't, as well. This way, you don't need to be a master of digital marketing before even launching your website, for instance.
One of the main advantages of conducting business online is that you don't have to leave anything down to chance, more or less. Online sales and marketing tools and techniques offer the unprecedented ability to measure nearly everything your customers and channel sales marketers do when they're engaging with your materials.
The first step in channel sales success is to break down your business strategy into separate goals. These could include gaining new channel sales partners, for example, for the providers. For the affiliates, merchants, and resellers, you'd probably do better to measure audience engagement rate.
Even these two brief examples are enough to get you thinking like an online business owner and marketer. Say you want to drive traffic to your website for affiliate earnings for travel services, for instance.
You might begin by writing a bunch of blog content. This will serve as material for your inbound or content marketing campaign. You could then schedule these posts to publish at a particular time on your social media channels. You could even use a link shortener service, to get even more measurable metrics from these marketing materials.
You can gather data around every metric that could be beneficial in making your channel sales business successful. Before you know it, you'll have a clear, detailed, actionable plan to build and grow your online business to reach its ultimate potential.
Doing business online means you never need to be fumbling in the dark. Whether you're looking to make sure your channel sales platform is at peak performance or you want to make sure your digital marketing is effective, we are here for you. Contact us today and let us know how we can help bring your vision to life!