What is Difference Between Channel Sales and Direct Sales ?

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What was the last thing you brought?

From where did you buy that thing?

Let us say you bought or buy milk directly from a person who milkman(who milchs cows) , then it will be called direct sales.

It is called direct sales because here the producer or manufacturer is selling the product directly to you, a customer.

Direct Sales :

Direct sales is marked by absence of middlemen or channel partners between a company/producer/manufacturer and customer.

Direct Channel can be represented like this :

Producer/Manufacturer Salesperson =>Customer

Suppose instead of buying milk directly from milkman , your neighbour boys packaged branded milk of a national milk company.

In that case your neighbour Raj buys that milk brand from a, shopkeeper.

That particular packaged milk brand reached the shop through a channel of distribution partners.

Distribution partners are appointed by companies to increase width and depth of distribution of its products.

These distribution partners also called channel partners move the product in distribution channel for a commission.

Channel Sales :

This process of selling products through a chain of middlemen is called Channel sales.

Channel Sales can be depicted as:

Manufacturer=>Company warehouse=> Distributor=>Retailer=>Customer.

Difference no 2:

The other difference between Channel sales and direct sales is in cost of sales.

As In Channel sales there are more middlemen between company and customer, so the cost of selling is higher is Channel sales as each middleman provides services for a fee called margin.

Difference no 3 : Price to customer

As Cost of selling is included in final price of customer so in case of Channel Sales the customers end up paying more for the product than if the the customer buys product through a channel partner.

Hope it helps.

Sales Gurukul-A YouTube channel about Sales.

To get comprehensive knowledge about FMCG sales, buy our book on Flipkart by clicking this link now :
https://bit.ly/3kkXCDT


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