Which sales channels are you using to sell which products?
There’s no shortage of options, but different sales channels can yield vastly different results. Whether you are a business owner or sales leader, the types of sales channels you choose to use can have a significant impact on the health of your business.
If you are not taking advantage of multiple sales channels, you may miss out on significant revenue. Nearly three-quarters of shoppers say they shop on more than one channel.
You will need to make smart decisions about which channels to use and conduct regular sales analyses to make sure you are getting the ROI you need. You’ll need to understand the target market for each channel, how to position your brand identity, and when it’s smart to work with intermediaries.
The more places you sell, the more opportunity you have to showcase your products and service, but that’s only part of the equation. In this guide, we’ll explain how sales channels work, the different types of sales channels, and a strategy for launching multi-channel sales as part of your sales strategy.
What are Sales Channels?
Sales channels are the places you offer your products or services to reach your customers. They can be direct, such as your website or marketplace, or indirect, such as distributors and affiliates.
Depending on your business model, some organizations choose to do business over a single sales channel. Others use multichannel strategies to meet the needs of their customer base across several different sales channels.
Which channels you choose to use in the sales process, whether it’s for indirect sales or direct sales to your end customers, can make a significant difference. 44% of B2B buyers say they won’t do business with a company if they aren’t active on their preferred marketing channels. That can make the job of your sales force even more challenging.
The channels used will also impact your marketing strategies. For example, targeting direct-to-consumer eCommerce will take a different approach than B2B sales to a small business or enterprise company. How your marketing and sales team approach customers and close deals will change, as will how you use your customer relationship management (CRM) software and the metrics your sales reps track.
Direct Sales Channels
With a direct sales channel strategy, your business works directly with customers. This would include things like your website, an online storefront with a digital checkout, or a brick-and-mortar location.
Indirect Sales Channels
With indirect sales channels, your business model expands to include other retailers, wholesalers, or online marketplaces such as Amazon, eBay, Alibaba, or Shopify.
Distribution Channels
Your direct sales or indirect sales channels can provide distribution, and many do. In other cases, companies use third parties, such as dropshipping and print-on-demand, or 3PLs, to handle fulfillment.
13 Sales Channels & How to Use Them in Your Sales Strategy
Let’s take a look at some of the most common sales channels that organizations are using to sell their products and services. In no particular order, here are 13 sales channels brands use today.
1. Wholesale
Wholesale is when you sell your products to other businesses, who then sell them to customers. Businesses like Costco, Sam’s Club, and BJ’s all utilize a wholesale sales strategy.
Pros:
- Once established, wholesale partnerships can become exceptionally profitable
- You can sell large amounts of inventory, as long as you have the capital on hand to meet demand
Cons:
- Building wholesale relationships can take a long time
- You may have to do a test or limited run first and buy back any inventory that doesn’t sell
- If products don’t sell well, you may not get repeat orders
How to use this channel in your sales strategy: To start in wholesale selling, you’ll first need to develop a pricing strategy; establish policies regarding payment terms, shipping costs, and inventory buyback; and create an online catalog. Once this is done, identify your target reseller(s) and present a detailed proposal to their buying department.
2. Brick-and-Mortar Retail Sales
If you opt to open your own storefront to sell your product or service, you choose a retail sales strategy. Grocery stores, clothing stores, convenience stores, and discount stores–among many, many other store types–are all different types of retail stores.
Pros:
- Retail setups allow sales reps to build relationships with customers in person, one-on-one, which also provides more opportunities for cross-selling
- Revenue can be collected immediately upon the sale being made, since there are no middlemen involved
Cons:
- There are significant costs for purchasing/renting storefronts and paying monthly utility bills
- Additional costs include staffing for your property beyond the sales and management team, such as clerks/cashiers, security officers, janitors, etc
How to use this channel in your sales strategy: Opening a brick-and-mortar retail store requires a property lease; local ordinance approvals; on-site staffing; scheduling product ordering, delivery, and stocking; and more.
3. Traditional and eMarketplaces
Traditional marketplaces are usually local, in-person events, such as flea markets and farmer’s markets. However, now small and large businesses alike can compete against each other on online marketplaces like Amazon, eBay, Alibaba, eBay, Google Shopping, and more. The difference between ecommerce platform and marketplace is that the latter sales channel offers multiple products and brands, allowing a customer to search and compare price points.
Pros:
- eMarketplaces present your product to tons of potential customers who are actively searching for a similar product/solution
Cons:
- Online product listings are presented side-by-side with your competitors
- At-a-glance catalog listings almost force you to compete based on price, rather than on distinguishing product features
- You’ll be required to agree to the marketplace’s terms and conditions, with little room for negotiation, listing formatting, or customer communications
How to use this channel in your sales strategy: Create an account on the site you’d like to use, and go through the steps of setting up your in-platform shop. This may require linking to your product catalog, WooCommerce or Shopify store, or individual product pages that you’d like to promote and sell.
WooCommerce integration is particularly easy. There are plugins that will do the hard work for you, and an online community of experts can help if you get stuck. Meanwhile, you have a platform that is both flexible and easily scalable. To get the most out of it, however, make sure you plan your steps and think of everything – from getting a reliable WooCommerce hosting service to researching the add-ons and themes you'll use.
4. Social Media Marketplaces
Modern social media marketplaces are growing in popularity, such as Facebook Shops, Instagram Shopping, Pinterest Shops, and TikTok Shop. These social shops exist in an online space where thousands of users already log in and congregate every day.
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Pros:
- You can expose your brand to specific, highly targeted audiences through both paid and organic campaigns
- Collaborating with influencers can cause brand awareness and product sales to skyrocket
Cons:
- To be effective, these modern, social marketplaces usually require a very active and engaged effort from your marketing team, often posting multiple times per day
- A campaign that’s too successful can cause supply/demand issues or may overwhelm customer support staff
- Negative reviews or interactions can quickly drive a social campaign into the ground and must be mitigated quickly
How to use this channel in your sales strategy: Much like creating an eMarketplace account, you’ll first have to open your social media business page, then create your in-platform online storefront.
5. Organic and Paid Social Media
If you don’t want to go through the effort of setting up an entire social media shop, you can focus on simply building your social media brand and funneling sales to your site. The poster child for this type of online sales strategy is Dollar Shave Club, which leveraged social selling to build a brand that sold for $1 billion to Unilever.
Pros:
- Use platforms for both organic and paid advertising
- Source potential customers and sell directly to them
- LinkedIn is a treasure trove for B2B sales, with 65 million decision-makers among its members.
Cons:
- Social media can be noisy, so it’s important to create quality content and campaigns that get noticed and engage your audience
How to use this channel in your sales strategy: First, know who your audience is, which platforms they use, and what topics they care about. Then involve yourself in the conversation there. If you have a creative marketing team that can make Dollar Shave Club-quality content, all the better– but if not, your followers will appreciate helpful and insightful information, and later when they need your solutions, they’ll think of you first.
6. B2B Sales Channels
Business-to-business (B2B) sales involves selling your product or service directly to another business, which then uses it in its own work. Examples include functional requirements to get work done (like office desks and computers), raw materials needed to produce a final product (like paper, needed for printing books), and software or services (like accounting software).
Pros:
- B2B sales generally just trend upwards over time. In fact, the eCommerce market is expected to grow to $18.7 billion by 2027
- Business-to-business buyers have become more comfortable making significant purchases online
Cons:
- B2B deals may have a long sales cycle, requiring various departments to approve the purchase
- B2B customers may request customizations or modifications to have your product/service altered specifically to their needs
How to use this channel in your sales strategy: If your product or service is ideal for professional use, develop an ideal customer profile for your B2B customers, and begin identifying leads and targeting them with B2B sales strategies.
7. Direct-to-Consumer
With direct-to-consumer (DTC) sales, your customers have no other option but to buy directly from you. DTC strategies rely heavily on providing high-quality goods and services and a fantastic customer experience. They lean on word-of-mouth marketing and a hefty marketing budget to attract new customers.
Pros:
- Full control of the customer experience and journey
- Easily develop close relationships with your customers, increasing brand loyalty and customer lifetime value
- Margins for goods sold are generally high, as there are no payments or commissions owed
Cons:
- Marketing costs and campaign management are entirely your responsibility
How to use this channel in your sales strategy: Make sure your website, online sales, and customer service functions are fully functional and user friendly. Then promote, promote, promote! Put your brand and products on full display with a variety of strategically targeted marketing campaigns.
8. eCommerce
eCommerce sales is a broad term that may include any combination of direct sales via your website, marketplace platforms, modern platforms, or any other online format. Take TOMS shoes, for instance. TOMS can be purchased on their own website, via resellers’ websites (like Macy’s), on Amazon’s marketplace, through their Facebook shop, and more.
Pros:
- A diverse eCommerce strategy enables customers to find your product almost anywhere they look
Cons:
- Managing a large assortment of online sales platforms or relationships can be cumbersome or hard to track
How to use this channel in your sales strategy: Identify the online channels that work best for your brand, being sure not to over-extend your sales and marketing team(s). Work with buyers or partners to showcase your product in the most consistent format possible using similar imagery across all platforms, but modify messaging as needed for each platform’s specific audience.
9. White Label
With white-label products, sellers provide a generic version of their product, allowing resellers to brand it and/or add it into their own umbrella of products. An example would include a software agency that creates databases or apps for other companies to use, with their own brand name appearing on the software.
Pros:
- You can focus on producing/manufacturing, maintaining, and upgrading your product without also having to figure out marketing it directly to users
Cons:
- Although you provide the goods and services, you’ll be invisible to the end-user
How to use this channel in your sales strategy: Develop your product, but don’t put any branding on it. Identify businesses that would benefit from using your product in their day-to-day work, or whose customers could use your product, and develop a sales presentation that shows how your product can be white-labeled with their brand name and resold to their consumers at a profit.
10. Resellers
Resellers purchase your product, then resell it to their own customers at a profit. They may simply sell your product on its own, or they may group it with other complementary products and services. Take curated subscription boxes, for instance. Buyers purchase a selection of products from different manufacturers, package them together, and resell them at a profit to their customers.
Pros:
- Access new markets by partnering with resellers in different regions or territories
- Gain credibility by having your product or service paired alongside notable or highly regarded brand names
Cons:
- You won’t have much control over what products or services your own products will be presented alongside
- Resellers may opt not to purchase from you again if your product doesn’t sell well or generate enough excitement among their customer base
How to use this channel in your sales strategy: Reach out to retail stores that may be interested in reselling your product, or utilize channel partners to group your product or service with theirs.
11. Sales Agents and Brokers
Sales agents and brokers both earn a commission based on the deals they help you close. Sales agents are companies or people that sell your products or services to customers on your behalf. You can work with a sales agent on a continual basis.
Brokers do similar work and will bring eligible and qualified leads or customers to you to help broker a deal. However, working with a broker is usually a short-term relationship during a one-time deal–think of a real estate or franchise broker, for example.
Pros:
- Agents and brokers work to promote and sell your product, much like an in-house sales rep, but without the costs of employment and overhead
Cons:
- Successful sales agents can drive revenue for your business, but it’s often inconsistent
- Broker commissions can be quite high due to the nature of their one-time deals
How to use this channel in your sales strategy: Find sales agencies and business brokers that specialize in your industry, negotiate the terms of your agreement, sign on the dotted line, and watch the leads or sales come in.
12. Partnerships
‘Partnerships’ is a general term that involves forming a relationship with someone to help sell your products. Influencers, affiliate marketers, resellers, and channel partners are all examples of partners. In all cases, your partners will earn some sort of payment or commission for an agreed-upon action taken by their followers, such as a click to the product page, a free trial sign-up, a 6-month subscription, or a full and complete sale.
Pros:
- Gain access to new audiences or markets that hadn’t yet been tapped
- Quickly gain credibility due to partnerships with reputable brands
- Both partners benefit from a well-structured partnership: Your company gains more business, and your partner earns a commission from each lead or conversion they generate
Cons:
- There are marketing costs associated with partnerships, such as flat fees and commissions for each newly generated lead
How to use this channel in your sales strategy: Based on the product or service you sell, decide which type of partner makes the most sense. Do some digging to see which partners are at the top of the game in your industry, and work your way down the list to reach out, see what their partnership agreements look like, and find the best fit for your product.
Psst… Curious how to set up a partnership program for your SaaS business? See how we did it here at Close:
13. Personal Selling Channels
Personal selling occurs when a company maintains a sales team to handle its own inside and outside sales. Personal selling activities run the gamut from initial prospecting and lead generation all the way to long-term customer retention and upselling–and every little interaction in between.
Pros:
- Maintain full control of every aspect of the sales process by managing it all in-house
- Full insight into the sales funnel at any given time, for any sales rep
Cons:
- Sales efforts are time-consuming and can vary widely by your industry and target market, and even seasonality or economy
- It can be hard to see what sales efforts are most profitable at a high level without the help of sales analytics software
How to use this channel in your sales strategy: Having a sales team in place is the obvious answer here, but more important than that is to provide your reps with the tools they need to do the job well. This includes detailed customer personas so they know who to target when prospecting; tried-and-true scripts that work; email automation for nurturing leads over time; and product knowledge training to make sure they’re fully prepared for any question a prospect may ask.
How to Create a Sales Strategy Across Multiple Channels
Selling on multiple channels starts with understanding your products or services and how they fit into an omnichannel sales strategy. Here are the five steps you should consider when setting up any new sales channels.
Have a Deep Understanding of Your Products, Service, and Channels
You’ll want to gather the data and research you have on your products and services to help create the right positioning. Success in omnichannel sales often results from having a specific strategy for each channel, but you must first start with the basic data.
This should include customer demographics and behavioral data. This helps you define buyer personas and ideal customer profiles (ICPs) which you’ll use when comparing sales channels.
Other data points include:
- Product compatibility
- Pricing structures
- Commission fees
- Cost of production and fulfillment
- Internal costs
- Competitive factors
You will also need to define your unique sales proposition (USP) to determine how you will stand out against other products or services on the market.
The best CRM platforms can help you find and detail these data points.
Apply This Understanding to Any Channel You Consider
Any channel you choose will have its own set of pros and cons. You’ll want to evaluate each potential sales channel using the data you’ve gathered to ensure a particular channel can meet your goals.
Products and services must be the right fit. For example, you wouldn’t sell Medicare Advantage programs to an older audience on a platform like TikTok that skews exceptionally young.
You’ll want to make sure each sale channel is a match for your products or services, both with the audience and price points. You will need to factor in the costs of using a particular platform or any commission or referral fees you pay to ensure you maintain minimum profit margins.
Set Up Channels and Partnerships
Once you’ve found the right match, you can deploy your multi-channel sales strategy by establishing your sales channels. If you partner with third-party marketplaces, sales agents, influencers, or other partners, you will want to have a clear understanding of who is responsible for what, how fees are paid, and how marketing and promotion will be handled.
Once you have identified the right partners, you will also need an outreach strategy to connect with them and demonstrate why they should partner with you.
Motivate and Incentivize Channel Partners
While your partners act as an extension of your sales team, you don’t have direct control over their activities. Unlike your employees, who have significant incentives to sell and meet company goals, partners may not have such an incentive.
As such, you’ll want to examine your sales strategies for each channel to give them a reason to support your brand. For example, you should ensure you have plenty of resources available for partners to sell, including:
- Sales on-sheets
- Testimonials
- Competitive comparisons
- Calling scripts or playbooks
- Email templates
- Common objections and solutions
Anything you can do to provide the materials your partners need to be successful will help. When it’s a struggle to sell, they likely won’t do a good job for you.
You may also want to provide additional financial incentives or rewards for partners that have a significant opportunity. Many companies offer tiers in their partner programs, including enhanced commissions for higher sales results or special perks for high-performing partners.
Monitor Your Sales Channels
It’s crucial that you employ mechanisms to track your customers and your sales by channel to know what’s working and what’s not. Today, multichannel sales account for nearly 46% of all eCommerce sales, but there can be wide variations in results across channels even for similar businesses in similar industries.
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You need to monitor each channel carefully to ensure you are meeting the goals you set in the beginning for return on investment. You will want to keep a close eye on the important sales metrics, including channel sales, pipeline health, KPIs, and other data analytics. For example, Close helps you easily collect, report, and visualize the data you need to monitor your sales channels.
You will also want to make sure your CRM allows for customizable data fields and activities so you can track conversions by channel.
Maintain Communication
Sales channels are rarely set-it and forget-it. Make sure you stay in touch with your channel partners so they keep your products and services top of mind. This can help defuse any problems or frustrations that are preventing sales. At the same time, your partners must know you’re invested in their success.
Part of this communication strategy should include making your partners aware of any product updates, new products, competitive threats, or shifts in strategy.
Final Thoughts on Which Sales Channels Will Be Most Effective (for You) in 2024
To sell your products or service successfully, you need to get the basics right. This means a high-quality product with a strong value proposition. You need to provide a great customer experience and price your product appropriately.
When it comes to multi-channel selling, you need to ensure that your products and service match up with the channel’s audience and that you design an appropriate sales strategy for your target market and potential customers. Each sales channel has its own purpose, so you need to find the ones that fit your business needs best.
Close is the best customer relationship management (CRM) solution that’s built for growth. Trusted by some of the world’s fastest-scaling sales teams, you get all the tools you need to grow revenue quickly and manage all of your sales activities. Not only can you connect data to customers, but you can automate much of your sales workflow so you can sell more in less time.
Sign up for Close today or watch a 10-minute demo to see Close in action and how it can help grow your business.
