Industrial Selling

Industrial selling is selling products and machinery that manufacturing

companies and factories use to build and sell their merchandise. Industrial
products are sold at high-value price points and in bulk. For instance, the selling
of machinery and parts used to build airplanes would be categorized as an
industrial sale.
Characteristics of Industrial Sales
i. Fewer Customers
A significant differentiating factor of industrial sales is that the customer
base is considerably smaller than other markets. There aren’t as many
companies in need of industrial machinery as businesses in need of
social media management tools.
Since there is a smaller customer base, competition is higher. For
example, there are over 100,000 restaurants in the United States, but
there aren’t over 100,000 car manufacturers. In fact, there are only
15. Thus, selling machinery used in automobile manufacturing is more
competitive, as there are only 15 possible companies that could make
use of the product.
Considering that industrial customer bases are smaller and the
competition is high, it’s essential to have a comprehensive
understanding of who your customers are. Salespeople can’t afford to
lose prospective customers from being uninformed, especially when
there aren’t many to begin with.
ii. Complex Purchasing Decisions
Industrial sales are also higher stakes than traditional sales. The value
of the products being sold is higher because these products are often
critical factors in constructing a business’s final product. For example,
an airplane manufacturer cannot create its final product without the
necessary parts and machinery. Still, these products need to be of high-
quality so that there is no risk involved in using them in their build.
Since the products sold in industrial markets bear significant importance
in day-to-day processes, these deals require complex purchasing
decisions as businesses need to conduct product assessments to
ensure that they’re the best fit.
iii. A Focus on Customer Retention
Industrial sales contracts are often long-term, as businesses don’t want
to redo the complex process of buying and purchasing the parts and
machinery to facilitate their day-to-day operations. If the product works
for them, they’ll want to continue using it and renewing their contracts
with you.
As a result, industrial sales require an increased focus on customer
retention. Using a Customer Relationship Management (CRM) platform,
like Sales Hub from HubSpot, can help industrial salespeople retain
and delight their customers.
iv. After-Sales Follow Up
Regardless of industry, salespeople know that following up with leads
after deals are closed is extremely important, but it is a significant pillar
of industrial sales. Since contracts are long-term, after-sales follow-up
can look like establishing a consistent communication schedule, where
you present yourself as a resource to the companies you work with.
For example, a sales automation tool can automate your follow-up
schedule for emails, calls, and meetings to ensure that you never take
too much time between reaching out to your clients.

Consumer Selling
Direct consumer selling is the oldest way of selling the goods. Under
this system, the goods are directly sold to the consumer by the
manufacturer. Direct consumer selling is gaining immense popularity
these days on account of high cost of distribution through the
middlemen.
Methods of Direct Selling:

i. Sale at the Manufacturer’s Plant or Head Office:

Under this method, the consumer comes to the manufacturer to
purchase the goods. For example, customers go to bakery to purchase
bread and biscuits. In case of industrial products, the industrial user
may visit the manufacturer’s premises and purchase the product after
due satisfaction by understanding various technicalities involved in the
product.

ii. House To House Selling:

Manufacturer sometimes sale to the consumer through his salesmen
who call at the doors of consumers. This is also known as door to door
selling or direct selling by canvassers. This method can be successfully
employed by a manufacturer for introducing a new product in the market.

iii. Sale by Mail Order Method:

Under this method, goods are sold to customers through post by
sending registered parcels. The goods may be sent through railways
and transport agencies. Customers who are living at remote and
faraway places are greatly benefited by this method of selling.

iv. Sale by Opening Own Retail Shops:

Sometimes manufacturers establish their own retail shops to sell their
products directly to the consumers. Manufacturers of perishable goods
sell their products by opening their own retail shops. When the
manufacturer wants to establish a direct link with the customer and keep
the price of the products in control, he can resort to direct consumer
selling by opening his own retail shops.
 v. Sale through Mechanical Devices:
Under this method, goods are sold to customers by employing
automatic selling machines or vending machines. This method has
already been explained in detail.

Channels of distribution

Channels of distribution (or a distribution channel) are channels of

businesses or intermediaries which a product or service travels through
before reaching the final customer.

These channels often include:

• wholesalers
• distributors
• retailers
• online stores

Examples of channels of distribution

There are 3 main types of distribution channels.

Each type includes some sort of combination of manufacturer,

wholesaler, retailer, and final paying customer.

The first type includes all 4 channels and is the longest.

A good example of this would be the beverage industry, as

manufacturers usually sell their product to a wholesaler, who in turn sell
to a retail store.

The second excludes the wholesalers and goes straight to the retailer.
Car dealerships are a good example of this type of channel. Dealerships
will typically buy new cars straight from the manufacturer and then sell
it directly to the paying customer.
The third and final type goes straight from the manufacturer to the
paying customer. One of the best examples of this is Apple. You can
buy Apple products directly from their retail stores.

Types of distribution channels

Businesses use three main distribution channels: direct, hybrid, and

indirect.

They vary from each other, depending on the steps a product takes to
reach the end consumer from the raw materials.

1. Direct: Manufacturer → Consumer

Direct channels of distribution involve just the manufacturer and the

customer.

In this case, the producer sells the product directly to the clients through
a website or a physical shop.

A good example is a farmer who would rather sell his products directly
to his customers through a farm stand instead of selling produce
wholesale to a market.

2. Indirect: Manufacturer → Wholesaler → Retailer → Consumer

This channel introduces a new type of intermediary: the wholesaler.

A wholesaler is a business that purchases products in bulk and sells

them to retailers in bulk.

Since they benefit from economies of scale, they can profit by selling to
various retailers at a slightly higher price than the manufacturer.

3. Hybrid: Manufacturer → Authorized retailer → Consumer

A hybrid channel of distribution is a mix of direct and indirect distribution

channels.