Unlike the direct forms of sales where a manufacturer distributes their products directly either through their employees or an agent, there is another arrangement, which is known as the distributorships form, wherein a manufacturer outsources his products to an independent third party known as the distributor.
A distributor has to bear all the unknown aspects which are connected to the circulation of the merchandises, its vending, and as well recovering their expenditure, and also making some gain.
However, there are some disadvantages in the distributor system.
This is because the distributor has to recover their expenses and also bear the risks involved with the product and its distribution and consequently, the manufacturer is forced to sell the products to the distributor at a lesser price.
Later, on there may be other drawbacks if the distributor terminates the deal as soon as it ends.
It becomes harder on the part of the entrepreneur if the set up of agreement was used for a particular advertising and marketing territory.
Thus, the businessman may lose his share in the territory if he cannot find some other alternative substitute.
In view of the above disadvantages, direct sales have become more common especially due to the advances made in the field of the information technology.
Through the medium of the internet, the customer can directly purchase from the manufacturer instead of buying it from the market, often at a lesser price.
The prices of products in retail outlets are higher, as it must recover the costs involved in marketing the product.
The purchaser also gets the facility of ordering directly from the manufacturer and hence a close relationship grows between the manufacturer and the consumer.
The consumer can also get easy access to the detailed information of the products and its benefits if they buy directly from the manufacturer.
As a result of this if you are toying with the idea of starting a company, you may think about of having direct sales set up for your business.
Though achievement may be obtained, you might also face a lot of problems in direct sales.
Thus, it will be intelligent on your part to do some research on direct business concerning your business interest as you are likely to make large investments.
Direct sales have many advantages.
The greatest advantage is that you can hope to earn great profits in it.
The cost of setting up direct sales campaign is also less when compared to the distributor system.
You can also hope to make substantial savings on the cost of travel expenses.
The products can also be sold at slightly higher price than what the distributor was offering.
You can also take the help of the internet for advertising your products, which will ultimately increase your sales.
The consumers are also happy as the products are delivered directly to their doors.
You can employ a few sales representatives to market your product door to door, or can even use your sales skills for selling your products.
Anybody with some education and experience can make a success in direct sales if they put in some efforts.
However, the most important and significant point is that your business can hope to make some extra profit if you use direct sales methods instead of opting for the distributorships system.