For retail businesses, establishing a new sales channel is a proven strategy for increasing revenue. In addition to offering another path for distributing your goods, it can also help introduce your brand to a new audience.
When I'm asked for advice on the best way to set up a new channel, I always lead with "Leverage your partnerships." Breaking into a new sales channel can have a steep learning curve. This is where having great external partners (think: packaging, fulfillment, and e-commerce platform vendors) adds tons of value.
Leveraging these partnerships can help make opening a sales channel easier and faster:
- Technology--Your vendors or partners may have technology tools that you can use to establish or manage another channel. For example, they may have a shipping and freight analytics tool to help you forecast the financial impact of a new channel.
- Experience--Partners may have experience setting up or servicing clients in the channel you're trying to establish. If so, they can guide you through the process so you're not learning as you go.
- Relationships--A true example of your network being your net worth. Your vendors or partners probably know people that you should know. Don't be shy to ask for introductions--partnerships are a two-way street.
Keeping this in mind, here are some ideas, based on the three sales channels we most often support: business to consumer (B2C), business to business (B2B), and Fulfillment by Amazon (FBA).
Selling to the Consumer
B2B brands looking to establish a new sales channel should consider business to consumer (B2C). This sales channel includes e-commerce sites, your own brick-and-mortar stores, and shoppable social media.
E-commerce has seen a meteoric rise in popularity in the past few years. Any brand expanding into this channel needs to understand how to connect with customers on an emotional level. We're seeing historically B2B brands like General Electric realize the importance of an e-commerce presence and establishing themselves in this space. With their "C by GE" smart lighting brand, GE took the focus off the technical specifications of the product they're selling, and created a website focused on convenience and the lifestyle their product affords the consumer.
Even current B2C brands can expand within this channel: Consider using Instagram--which has evolved into an online shopping mall--to feature shoppable posts. Another strategy might be to reach out to influencers whose audiences can tag your products so users can click and buy without ever leaving the platform.
Selling to Other Businesses
Business to business (B2B) covers wholesale, which means getting your products into a retailer such as Target, rather than selling directly to consumers.
E-commerce brands can reach shoppers who frequent big retailers to boost their customer base and sales. When you're considering which retailers to approach about selling your products in-store, consider those that overlap with your brand messaging and values.
For example, take how the razor brand Harry's, whose motto is "You deserve a great shave at a fair price," partnered with mega-retailer Target, which also aims to sell quality products at affordable prices as illustrated by its own motto, "Expect more. Pay less."
Or consider creating a pop-up shop, a temporary retail space where e-commerce businesses can sell their goods, connect with customers, and increase brand awareness. If you have partners or relationships with brick-and-mortar retailers, you could try leveraging that connection to set up a "pop-in" shop in their existing location, or rent kiosks in malls or vacant storefronts to showcase your goods.
Try Selling on Amazon
If you've already got the two previously mentioned channels covered, consider Fulfillment by Amazon (FBA), which involves sending some of your stock to Amazon's warehouse to sell your products in Amazon's marketplace.
Not convinced about this one? Fifty-seven percent of shoppers did most of their online shopping on Amazon last year, an increase from 44 percent in 2018, according to Dotcom Distribution's 2019 eCommerce Consumer Study.
Opening a new sales channel on Amazon will give you access to the company's steady stream of traffic and buyers--and allow Amazon Prime shoppers looking for fast delivery to receive your products next day. And with a good fulfillment provider, the process of receiving product from your manufacturers and splitting it with Amazon is seamless.
Setting up a new sales channel can result in big revenue increases. Maximize your chance of success by tapping into the relationships, platforms, and resources you already have, because there is power in collaboration.