What are indirect sales?
With indirect sales, companies use third parties, such as distributors or resellers, to sell their products or services to customers. Instead of relying on an internal sales team to sell products directly, indirect sales channels are a common way for companies to get their products to market, enter new territories, offer different types of support to their customers, or quickly scale up their sales efforts.
Usually, companies use both direct and indirect sales channels to sell their products. Consumer-facing suppliers, like those in the auto, electronics, and fashion industries, will typically work with extensive indirect sales networks. Industries that rely more on direct sales channels typically require a higher level of expertise, such as healthcare or real estate. However, even these industries will employ some indirect sales methods.
For example, let’s imagine you’re a healthcare startup, and you’ve developed cutting-edge medical coding software. Rather than selling directly to clinics and hospitals, you may also partner with IT consultants or companies who specialize in the healthcare industry and understand its nuances. These partners then sell your software to their existing network of customers. They may even offer implementation and support services so customers can get your software up and running with ease.
In this example, an indirect sales approach offers a few key advantages:
- It allows your company to focus on its core competencies—improving your current software and building new solutions for healthcare companies
- It extends your company’s reach, helping you access local markets and networks that you might not have the resources to target directly
- These partners already have a good understanding of nuanced healthcare regulations, ensuring your sales efforts are compliant with industry standards
- It can be cost-efficient, as it reduces the need for a large in-house sales team and the time to build new networks in these markets
When working with indirect sellers, you must ensure they understand your products, align with your company’s values, and are motivated to sell your offerings. Communication, training, incentive programs, and reporting are all essential elements of building a thriving indirect sales strategy.