What is channel sales & How Could it Benefit Your Farm?
Updated: Nov 15, 2018
Defining Channel Sales
Channel Sales can be defined as the distribution path that a business uses to sell a product or service.
A sales channel is an individual method used to distribute a product or service that includes like buyers. Companies use different sales channels to maximize their customer reach. While the goal of channel sales is to reach your customers, selling through more than one sales channel gives you the opportunity to diversify your buyers and revenue streams.
Why is this important?
Diversifying the channels in which you sell, helps with mitigating the risk in selling to a single buyer in a single sales channel. When shifts take place in the specific market that a sales channel operates, the effects reverberate across all participating stakeholders. An example of this might be if a cooperative sells to a regional grocery retailer and that retailer is acquired by another grocer. The new grocer could change the guidelines for existing suppliers, or choose to only purchase from a specific supplier for certain products. The same scenario could benefit a cooperative if the new grocer is interested in having them supply more of their stores. Without being able predict the outcome of changes with a buyer, growers can the mitigate the risk by selling to buyers in different sales channels.
If You Produce or Process Crops This is a list of 6 Sales Channels To Explore:
The Federal Government
Regional & National Wholesalers
Finished Good Manufacturers
Keep This In Mind
Selling to multiple channels will require meeting certifications and safety standards of buyers within each channel.
Every sales channel may not benefit your farm. Filter each through your goal for your business, as some selling channels may not aid in attaining your goals.
Seek help – To determine which selling channels might be best for you reach out to agents at your local extension agency and seek the help of an agricultural sales professional.
This is a starting point for exploring a multi-channel sales strategy for your farm or processing business. There are pros and cons depending on your businesses current yield and processing capacity. We’ll provide more information on each sales channel with tips on how to plan for entering each one.