Modern technology has made entrepreneurship easier. With many ways to generate income online, more business owners are creating multi-sales channel strategies to increase traffic and boost profits. While these strategies offer great potential, they have pros and cons.
What Are Sales Channels and How Do They Work?
Sales channels are platforms where businesses offer products and services to customers. These channels are either direct or indirect.
Direct sales channels let businesses interact with customers directly, through a company website or physical store.
With indirect channels, a third party acts as a middleman between business and customer. Here are sales channels business owners can use to increase profit and grow.
Traditional Marketplaces
AliExpress, Amazon, and Etsy are traditional marketplaces that offer a range of products and attract a large, established customer base. Customers mostly search for products rather than brands, which increases competition. Businesses in these channels have little control over how their products are promoted and must pay commissions on all sales.
Modern Marketplaces
Modern marketplaces are content-driven platforms such as TikTok, Instagram, and Facebook. These platforms are great for marketing and selling products because most people already spend a lot of time on them. A link or icon makes shopping easy and accessible. One key advantage is the ability to track performance and join with influencers to promote and cross-sell products.
However, there are downsides. You must create content often to keep products relevant. That means staying trendy and even paying for useful content. Dealing with social media algorithms can be challenging, and staying visible demands consistent effort.
Online Stores
Online stores are direct sales channels. Businesses have total control over how products are displayed and sold, with no middlemen taking a cut. Start-up costs for online stores are often low, as you don’t need a physical location or staff. You can use customer data to optimize sales leads, with no third-party branding or product restrictions like those on modern marketplaces.
The downside is that businesses may need to invest more in marketing to get traffic, and the success of the store depends solely on the owner’s efforts.