Sales channels describe the journey of products moving from the manufacturer to an end customer. The sales channel can be understood as a pipeline that delivers items from point A to point B, and how they are sold to customers.
Sales channels may be direct or indirect. Direct sales channels are driven by companies selling products directly to the consumer. Indirect sales channels are created by companies selling products through a third party to a consumer.
There are four major types of sales channels:
- Retail: Businesses sell products directly to consumers through an owned channel.
- Wholesale: Businesses sell their products to a retailer, who will then sell them to customers.
- Direct-to-consumer (DTC): Businesses sell products to the consumer with no intermediaries.
- Business-to-consumer (B2B): Businesses sell directly to other businesses.
Businesses that sell directly to customers rely heavily on sales channels such as online ads, social media, or product catalogs. In contrast, businesses that sell to other businesses may use channels that include websites, cold calling, and trade expos. Each channel is carefully chosen to meet the needs and interests of target customers.