There are many routes to market. The key is to keep it simple. Here’s a quick guide.
If you are starting out in business, or already established, a key focus will be how you sell your goods or services. How you reach your customers is your route to market.
There are many different routes to market and different routes suit different products and services. The key to a successful route to market is simplicity. Make it as simple as possible for your customers to find and buy your goods.
Before deciding on your sales route you need to consider:
1: Your customers. Are they consumers, other businesses or government agencies?
2: Are you selling a product or a service?
3: Do you need to persuade your customers to buy your product/service or will they seek it out as a necessity?
4: Do your customers need to inspect your goods before buying them?
5: Will your customers see your product or service as a big investment, a mid-sized investment or an incidental buy?
6: Are you targeting your product or service at local, regional, national or international markets?
7: Is your product or service something the customer can use ‘out of the box’ or does it need to be installed or built?
Once you know what is is you are selling, and where your customers are, you may consider one, or a combination, of these routes to market:
1: Setting up shop
The most traditional route to market remains the physical shop. Advantages? Customers can see and touch the goods before buying them. You can control the shopping experience and encourage customers to stay in the store and buy more. You also have personal interaction with your customers and regular and instant feedback. Disadvantages? Large overheads – rent, staff, rates, stock, equipment and utility bills – to name but a few.
2: Selling to retailers
Your goods will be highly visible, and you have the potential to build a high-volume business quickly. The downside is that retailers can decrease your margins very easily. If you rely too heavily on one large retailer as your client, you can find yourself in a precarious business position should they suddenly demand more from you.
3: Selling online
Cheaper to establish than a physical shop and open 24/7, it also doesn’t matter where you base your business. The disadvantages include online advertising costs and the need to know, on a deep level, how the ecommerce and digital marketing worlds work.
4: Selling to wholesalers and distributors
Selling to wholesalers is the best way to sell large volumes. However, your selling price will be much, much lower than if you were selling directly to a customer.
5: Selling via mail order
Mail order is still big business, most of it to serve an older generation less accustomed to shopping online. The biggest disadvantage is producing high-quality catalogues and delivering them into the right hands. Printing catalogues and building accurate postal databases is expensive.
6: Using sales agents
Sales agents usually work on a commission basis, so you don’t have large wage bills. Agents work in specialist sectors and have established customers. It’s a good route to market without having to hire a sales force. The main disadvantage is the quality of the salesperson. Will they do justice to your goods or service? Will they describe them correctly to customers and represent your brand correctly?
For more information on planning your entry into new markets, you can read the ThinkBusiness.ie guide to export marketing campaigns and entering new markets.