One of the marketing techniques that are currently growing rapidly is by using reseller services. Some of the advantages that you can get with resellers are that you have sales and marketing employees without spending a penny on salary. But there are some things you need to pay attention to when using reseller services. I’ll discuss it for you in the following article.
First let’s break down first starting from the marketing and production system. If you’re a manufacturer, importer and wholesaler who doesn’t justify creating their own distribution outlets traditionally rely on retailers to interact with end customers. Of course, the Internet does offer an alternative path to the market, but it doesn’t address the issues of logistics, credit control and expertise in Internet marketing regardless of the descriptions peddled by hosting and e-commerce services.
Resellers may offer some significant financial benefits, although reseller margins tend to be in the order of 30% or more. The bigger problem is the potential loss of control over almost everything related to your brand, including market position, customer perception, and price.
A problem that often occurs in reseller marketing is the potential loss of the brand that you have been building. The main purpose of resellers is to sell as many products as possible for profit. They don’t really care about the brand of the product. It may be overstated that doesn’t fit the description of the product.
Other issues that arise around the determination of the lowest retail price. When resellers sell at a higher price than the actual price, the loss is on them. The potential of the same product at a higher price certainly requires great effort. But if your reseller pegs the price too low than actually can also be dangerous to your product brand. Of course, competition with other resellers will also not be established healthily.
To overcome things like the above, we can provide some recommendations for completion. If it happens to our clients, we would recommend making product identification and selection much simpler for end users. At no cost to resellers, custom-made display units with product selection guides are developed and installed in reseller showrooms.
We recommend and receive approval to conduct a “mystery-shopper” campaign for the main camera brand. The result is significant, namely that highly skilled salespeople at reseller outlets do not always use our own clients’ products, but do not consistently recommend and sell them to end customers. The reason becomes clear, namely that retail profit margins, commissions, trade promotions and other incentives exceed brand considerations.
Beyond simple facts
Management will have their own views on what went wrong and perhaps some pretty fixed ideas on how to proceed. Often, there will be resistance from a given quarter to any change. The hard part for a consultant is convincing management that internal navel observations, however thorough, may not in itself identify potentially important problems and solutions, especially if the latter arises in any radical way.
No two scenarios are likely to be identical. However, the evaluation process is very similar, even if the recommended solutions are different. Author firm ASPAC Consulting deploys proven techniques that typically include the following stages:
- Review of customer studies/research if ever conducted
- Sales analysis – not just ordinary accounting stuff, but looking for patterns in buying behavior over a year or more. This can strongly indicate adverse actions by individual retailers, but also from emerging trends.
- Discussions with a variety of client personnel – not just management. It should come as no surprise that personnel in the order department, warehouse and loading docks may have an excellent understanding of what works, what doesn’t and how customers think about the company, its products and services. We offer assurance that nothing detrimental will be attributed to the individual providing the information.
- External discussions with reseller options – again at different levels to include frontline staff as well as management, which covers similar issues above. Interviewees will tell us, with confidence, things they would never say to an actual company representative.
- The preparation of “strategic options” summarizes the findings and presents several alternative solutions and possible outcomes that will affect various parties in the distribution chain.
- Scope of the proposed work, if appropriate
Reasons to consider change
Implicit above is the need to take an unbiased new view of the entire end-to-end marketing process. It would be fair to say that consultants are generally not welcome in many companies and some of those attitudes are appropriate. However, better ones provide new insights and solutions that cover the needs of the business and its customers.
Just one more thought about the selection of consultants – often it will be the mindset of the board and/or management about the selection criteria. If the company is of significant size, there may be a preference to use only professional companies “the upper end of the city”. To be blunt about it, it won’t always be a wise decision. A consultant with broad category experience may be a better choice than an MBA involved at great cost who may not have the same street experience and/or techniques to get the real story from stakeholders.