Indirect distribution

Also known as: indirect sales

If a manufacturer does not sell his goods directly to the end customer, but rather through another company, sales representative or broker, this is referred to as indirect sales. Intermediate dealers can buy the goods from the manufacturer and resell them (wholesalers or retailers) or act as intermediaries (pure sales organization or commercial agent).

Distribution through companies that are legally independent but over which the manufacturer can exert economic influence (dealer, OEM, franchise partner) is carried out within the Marketing Mixes not referred to as indirect.

Benefits of indirect sales

In the case of consumer goods in particular, there is a mass distribution with its own Direct sales hardly possible for a manufacturer and associated with very high costs. The use of wholesalers and retailers for sales enables a high range with relatively little effort.

By outsourcing the entire logistics and parts of the marketing, the manufacturer can concentrate on his own competencies.

Disadvantages of indirect sales

As a result of indirect sales, the manufacturer partly loses control over sales and also over pricing (keyword Pricing policy). Only retail companies gain important data about customers and their purchasing behavior. The manufacturer must obtain such data in other ways, if he needs it.

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