B2B Questions Resellers Are Both Term Paper

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The highly personalized selling of a car dealership. While grocery store attendants do not stop you within minutes of being in the store and ask how they can help you find what you need, anyone walking into a car lot will surely be approached within the first five minutes of arriving. The major difference is the gross margins and profits for each of these products.

In the case of the grocery store, margins and profits per item are quite small and there is a very short sales cycle for them. Picking up a roll of paper towels for example is a sales cycle of just three minutes or less, and as a result there is no need to provide service from the grocers' perspective.

Conversely the sales cycle of a car can be days or even months, and there is a significant amount of gross margin and profit involved in the product itself. For the salesman, there is a commission involved, or cash in their pocket, if they can convince you to buy the cars they are selling. For the auto sale there are also many other factors that contribute to the complexity of the decision itself. Colors, use of the vehicle, style, reliability and maintenance record, and many other factors all go into the decision. All of these considerations lead to a longer sales cycle.

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As a result there is the need for a direct sales person to assist with the purchasing decision making.

What emerges from this comparison of grocery vs. car shopping is the fundamental reason why direct selling is more prevalent in certain industries relative to others. In general the higher the gross margin and profits on a product, the more direct the selling models will be. That's because any company selling higher margin products will be able to afford more direct sales people to begin with. Second, the longer the sales cycle the more the need for a salesperson to shepherd the process. Third, direct sales are also a prevalent strategy where there is the need for consultation and assistance, as is the case with the purchase and customization of a new home. Finally, and converse to these points of high margin products, in the case of commodity products that are well-known and easily ordered online, the direct model makes the most sense to save on the costs of indirect channels. Examples of high sales velocity products in this area include Dell PCs and laptops, pet supplies, or books. In general however the higher the margin, profit or complexity in a product or service being sold, the more likely a direct model will be used to sell it......

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