Purposes of Channel Management

Channels of distributions were developed because business has grown more and more complicated by each passing decade. Before the industrial revolution, trade was mostly between the manufacturer and the customer, the producer and the consumer. The industrial revolution changed all that with the building of factories and assembly lines. The production of goods and services went through the roof that middlemen became needed to distribute the goods to end consumers. And that is exactly what the channel distribution is. Channel distribution or channel partners are middlemen that deliver the goods from the manufacturer or vendor to the consumer or the end user.

Through the years, the distribution channel had needed a set of strategies to organize and streamline the sales of products and services. Channel management solutions have been deemed necessary in this age of the Internet when the world became one big market that vendors can tap into. Here are number of sound reasons why industries need channel distributions and partners.

Increase efficiency in distribution of products and services. The increase in efficiency of movement means that the consumer can get a product or service the moment they want it. Imagine if you are having a craving for a certain brand of soda and you had to wait for it to get from the factory to your house. By having wholesale distributors, they can deliver the goods where you as a consumer can conveniently buy it.

Additional marketing incentive
Although most of the marketing campaign falls on the shoulder of vendors and manufacturers, customers associate products to certain channels. Channels need to contribute to the marketing of products so the customers will know where they can buy the products advertised on TV, Internet and other forms of media.

Simplify buy and sell
Wholesale distributors and dealers simplify the processes of buy and sell for the consumers. They take on the more complex tasks of paying for transportation of goods, taxes, etc. to provide a simple retail environment that consumers immediately understand.

Increase sales by scale
On the part of the vendor, channel partners enable them to manufacture and sell their products at a larger scale. Since more customers and consumers can be reached and the efficiency of deliver of goods is increased, the sale of the products will inevitably be exponentially increased.

Decrease cost of sales
Normally, we might think that having a middleman will great increase the cost of goods. It’s not necessarily true because wholesale distributors and retailers like Walmart for example will be able to absorb the overhead cost of transport, inventory, etc. because they buy in bulk. And due to the large number of customers that they cater to, they can afford to lower margins and still profit from their businesses.

Channel distributions have a vital role to play in the economic ecosystem. They need solutions to manage their tasks. Channel management solutions like partner portals can help vendors as well as the channel distributors be more efficient in their sales activities; automating tedious tasks and focusing their attention to the main objective and that’s increased revenues.