A lot of time usually passes from the moment we find that we have an interesting idea for a new electronic device to the moment we can say that we have in our hands a ready-made, fully refined and compliant with our expectations product, these are often months or even years of designing, analyzing, discussions with specialists and testing. However, practically the most important element of the entire product development is the customer, that is, the person through whom the sales of the device will drive all other processes in the company.
Finding the right sales channels and determining distribution methods for your own electronic device is one of the most important elements when planning the launch of your own product. How should this process proceed? What sales channels do we distinguish? How to find distributors for your own electronic device? These questions will be answered in this article.
What sales channels do we differentiate?
Sales is an extremely broad concept and encompasses a great many aspects and relationships. However, there are two main categories of sales in the market - this is indirect sales and direct sales. In the case of the second variant, selling involves setting up a sales platform such as an online store on your own, creating customer service processes, warehousing, shipping and complaint procedures. However, this is quite a difficult road to travel when you are a small company that wants to start selling a whole series of products. The organization of the previously mentioned processes is severely limited if we use indirect sales. What are the advantages and disadvantages of both solutions?
- the need to create a sales platform
- employment of people responsible for the processes of customer service, shipping, warehouse management and complaints
- long time to implement all the necessary elements of sales system operation
- more profit on product sales
- access to people who buy our products
- ability to quickly make changes to the products we sell
- each customer buys the product at the same price - we avoid competition of distributors
Sales by resellers
- less profit from product sales
- usually lack of information about customers buying our products
- products are stored at distributors, which makes it difficult to make changes to the device at the same time
- no need to create your own online store and build the structures needed to work effectively with retail customers
- facilitated process of taking orders - only wholesale orders
- increased sales through access to a larger group of customers
As we can see, both solutions have advantages and disadvantages that we need to keep in mind, but it is worth noting that the decision on the choice of sales method depends only on the company launching the product on the market. Of course, very often we can meet companies that conduct parallel sales independently and through resellers, but we definitely do not recommend this solution at the beginning, the basis is the development and implementation of a single sales channel, only when we are sure that all the processes of a particular sales channel work properly can we launch the second form of sales.
What is the process of starting sales with a distributor?
Every electronics manufacturer's little dream is the availability of its product in popular stores that sell stationary and online. How can we get our own product into distributors' stores? Typically, this is a process that requires some time and commitment, this is mainly due to quality control and the amount of work needed to introduce a new product to the offer. To understand how the procedures for introducing a new product to potential distributors work, we will discuss the various tasks in the process, focusing, of course, on electronic devices (each industry is distinguished by a slightly different approach to introducing a product to a distributor). It is also worth remembering that the processes described below will mainly apply to the situation in which our company decides to work with an external distributor for the first time and, in addition, we are a little-known brand that is introducing a new product.
- Contact of the manufacturer of an electronic device with a distributor
- Discussing the form of cooperation and its terms and conditions
- Establishing the margin on the products sold
- Determining the forms of delivery of products to the distributor's warehouses
- Sending graphic and text materials for product description by the manufacturer
- Delivery of the device for testing at the distributor - mainly in the case of little-known products
- First delivery of products for sale
- Implementation of sales at the distributor
After reviewing the list of processes required to introduce a product to a specific distributor, it is worth identifying a few elements of our product that are necessary to quickly launch sales to resellers:
- Textual materials - an accurate description of the product, preferably provided in the native language and English. It is worth remembering to properly create product descriptions, very important here are keywords and the construction of the entire text, so that it complies with the principles of SEO.
- Graphic materials - high quality product photos, it is very important to provide the distributor with product photos on a white background, so that they can add their watermark, and to provide shots showing the product in use. Having access to such materials will help better promote the product in the store itself, plus it will also reduce the amount of work involved in introducing the product. Of course, usually e-commerce companies have a position to take product photos, but it is worth remembering that providing them along with a description will greatly speed up the process of creating a product page.
- RRP - Recommended Retail Price - this is a rigid product price set by the manufacturer for sale at resellers - setting it top-down will avoid competition between resellers.
- MOQ - Minimum Order Quantity - the minimum quantity of specific products, specified by the manufacturer, that a distributor must order in order to be treated as a wholesale order.
- Price thresholds - these are the prices of the product when ordering a certain amount of it, it is worth setting them at the very beginning because they can encourage the distributor to place larger orders.
Once we know what we should prepare to introduce the product to a third-party distributor, it is worth discussing methods for finding potential resellers.
How to find a distributor for your own electronic device?
Due to the huge number of online and stationary stores, finding a potential reseller is usually straightforward, but it is worth reviewing some useful tips for finding and contacting resellers.
- The search for resellers is best conducted by searching for products similar to ours. If we know that competing companies have similar devices, we can confidently check in which stores we can buy them, this will be a good basis for finding suitable resellers.
- Let's try to contact large and popular distribution companies - they usually have well-developed departments for contacting suppliers, so we will quickly find out whether they want to cooperate with us and sell our products, or whether we should look for other resellers.
- The first contact with a potential distributor should contain a lot of information - this will help us avoid a long conversation in which we will be answering questions that should be answered at the very beginning of the conversation. It is worth in the first message to describe your product, attach a website that presents our device, describe possible forms of cooperation, inform about prices for distributors. This information will greatly facilitate our contact and speed up the decision-making by the relevant department at the distributor.
- Let's try to adapt to the procedures and standards of resellers - most often companies have developed certain standards when contacting suppliers, if we follow them we will certainly succeed in establishing cooperation faster.
- Let's be understanding and considerate when offering the distributor the purchase price of products for resale - of course, everyone wants to gain as much as possible from this transaction, but it is the distributor who does much of the work for us during the sale.
- Let's try to show the distributor as much of the advantages of our device as possible, treat him like a retail customer, but be honest about it.
The process of establishing a relationship with a reseller is not as simple as it might seem, but most often once done the work of creating text and graphic materials, price thresholds and resale prices will be able to be used in the course of establishing relationships with subsequent resellers.
If you are interested in creating your own electronic device to bring to market, feel free to contact us, we will be happy to give you ideas and design a great looking and working product!