Sales Channels: Follow the Money!
Sales channels for process instrumentation and automation (PI&A) suppliers are complex with one or more potential participants. These participants lie between the supplier and the process industry end user. Their functions include supplier-managed sales organizations, companies that provide value-added through inventory ownership and management, and companies that provide value-added through functional incorporation into larger products or systems.
Each product, or group of products, that move to the end user through a series of sales channel participants accumulates added-value, increasing the inherent value of the product to the end user. The profit of the value-added goes to the various participants along the channel to the end user.
An assessment of the sales channels can determine how best to support the channel participant in exploiting the value-added or consider ways the supplier can, through product modifications, service expansion, company acquisition, etc. can capture the value-added profit.
A PI&A product could move through 4 different channel participants before reaching its end destination
Understanding the various paths your products take to the end user is important. While end user demand ultimately determines the volume of sales, the price to be paid, etc., your ability to meet the requirements of the various sales channel participants may determine if, and how, you create and maintain your competitive advantage.
We would be happy to provide a Sales Channel Assessment proposal for your consideration in support of your business planning endeavors. Call us today to discuss how our Sales Channel Assessment program can work for you!