There are so many types of sales in commercial industry. One I would like to discuss today is selling to get new distributorships for a manufacturer. Specifically a bicycle manufacturer, as without these distributors the manufacturer has their options reduced to nothing more than selling to purchasing agents for big Box Retailers and that means slow payments, receivable problems, headaches, lawsuits and low cost high volume.
Such a limited business means cost cutting is key and therefore the brand names ends up suffering due to cheapness of product. It is far better a strategy in many cases to set up dealers networks and distributors in each market to sell the products. But in order to do this you have to set up dealers and that means personal sells; that is to say selling the dealers into moving into a dealership agreement to buy so many units per month, quarter or year and to give it their full attention.
Often companies who sell bicycles will want to carry a certain brand but only if the terms are good for them. Nevertheless the bicycle manufacturer must sell lots of bikes or no bikes are needed to be produced and the factory must close. Managing these dealer network sellers is not easy, as many are away in travel, with travel expenses and costs. Sometimes these sales processes take weeks and months and multiple visits.
It is therefore a huge cost, but a necessary one. With a strong set of dealers the bicycle manufacturer can move a lot of product. To insure this is the case it behooves bicycle manufacturers to hold back commissions and base it on the original sale plus an over ride of orders for the year. Consider these thoughts if you will.