Sales Model (I)
What is the difference between Active and Passive sales model? What is the Hybrid model? What is the advantage of Remote sales?
Posted: Nov 2007
The selling process can be organized in different ways, which depend of the business focus of your company. Basically, sales model of some company can be one of the following:
- Field Sales Force model is an "Active" way of approaching the market. This is also called a Supplier Model. It means that your Salesmen visit their customers in the market. Usually they do not visit final consumers of your product and service, but they rather visit outlets that supply the consumers. This means that you serving someone who is serving the final consumer.
Advantage: Bulk deliveries, large volume,
Disadvantage: Low Margin, Large Customer base, and no direct contact with consumers.
- Outlet Based Model is "Passive" way of serving the market. This is called the Retailer Model. This model is focused on supplying the product or service to consumers. This type of the company is usually supplied by other wholesaler supplier, who does not deliver their product to the market, but through outlet network.
Advantage: Large margin, Service from Supplier, Marketing support from supplier.
Disadvantage: Overheads, Large number of SKUs, Competition.
- Hybrid Model, which includes both Supplier and Retailer roles. This means that the same company is at same time supplier of their own outlets.
Advantage: Synergy of Supply Chain, Lower Costs
Disadvantage: Company is competitor to it's own customer at same time, therefore mixed role can be drawback.
- Remote Sales, through Internet, Catalogues, etc.
Advantage: Low overheads, large geographical area.
Disadvantage: No direct contact with customer, low interaction with customer.