There’s no question that direct sales are on the rise. The marketplace today is so competitive that many suppliers are looking for new revenue streams, sometimes in ways that overlap with your current client base. But is this increased diversification affecting your business any more than previous efforts have in the past?
WHY DIRECT SALES ARE OKAY
Despite the increased threats, the traditional supply chain of supplier-to-distributor-to-buyer seems to be doing just fine. The market is too big, and distributors are too valuable to the supply chain to lose support. As Scott explained above, suppliers will support sales channels that are necessary for their growth, and the traditional supply chain continues to offer just that. The vast sales reach of distributor companies offers too much business for supplier companies to ignore.
“I don’t see a whole lot of direct supplier-to-customer selling in the promotional industry,” said Justin Zavadil, vice president of sales resource group at American Solutions for Business, Glenwood, Minn. “The industry is so large and there are so many customers, that it is very hard for a supplier to reach the amount of clients that they can through the distributor channel.”
Distributors’ ability to focus tightly on customer service, as well as handle creatively complex orders, is another strength that adds to their value in the supply chain. “I believe buyers stand with their previous supply chain because they are having their needs met,” said Scott. “I also believe the more complex the account and its needs are, the more it’s in the favor of a distributor. In those cases, clients see the value of not doing the entire process on their own but hiring a professional to provide consulting to them.”
Finally, there’s the issue of trust. Many avenues of direct selling compete on price alone, but that strategy can backfire. Delivery speeds, product safety and other core sales issues revolve around reliability instead of price. That could convince those who buy direct to return to the traditional sales chain—especially if they get burned on a direct sale gone bad.