10 examples for effective sales channels for small businesses (2022)
Sales are the lifeblood of any business, but especially small businesses. Without a steady stream of revenue, a small business will quickly fold. That’s why it’s essential to have effective sales channels in place to ensure a consistent flow of sales.
There are many different sales channels available to small businesses, but not all of them will be effective for every business. It’s important to choose the right sales channels for your business, based on your products or services, your target market, and your budget.
Here are 10 examples of effective sales channels for small businesses:
1. Owner/operator sales
This is the most common sales channel for small businesses. The owner or operator of the business sells products or services directly to customers. Mostly, this can be done in person, over the phone, or online.
Oner/operator sales is a great option for small businesses because it’s typically the most cost-effective option. There are no middlemen or additional costs associated with using this sales channel. This way of sales is very common and many businesses start like this. The owner or founder is taking the phone and calling clients, doing door-to-door sales or acquires clients online via social media networks or e-mail.
The downside of owner/operator sales is that it can be time-consuming. The owner or operator of the business must be the one to make the sales calls, meet with potential customers, and close the sale. Because of this owners might have not enough time to focus on other important areas of the business which might be required to grow it.
The founder of the famous company Amway, Rich DeVos, was doing direct sales by himself. He was going door to door and asking people if they were interested in his product. He was also giving out free samples and discounts to people who were interested.
2. Direct sales force
A direct sales force is a team of salespeople who work for the business. They are typically compensated based on commission, and they focus on selling the business’s products or services.
A direct sales force can be an effective sales channel for small businesses because it provides a dedicated team of salespeople who are focused on selling the business’s products or services. A direct sales force is part of your organisation since the team members are your own employees which are usually more committed to the success of your company.
The downside of a direct sales force is that it can be expensive. The business must pay salaries and commissions to the salespeople, and there is also the cost of training and managing the sales team.
The Body Shop is a cosmetics company that is based in the United Kingdom. The company was founded in 1976 by Dame Anita Roddick. The company has over 2,500 stores in over 60 countries. The company is known for its ethical policies and its commitment to environmental and social causes. The company’s products are sold through a network of over 1,000 franchisees and independent distributors. The company’s success is largely due to its direct sales force that is passionate about the company’s mission and products.
3. Independent sales representatives
Independent sales representatives are individuals who sell products or services on behalf of the business. They are typically compensated based on commission, and they are not employees of the business.
Independent sales representatives can be a good option for small businesses because they extend your sales force without the cost of salaries. It can be a great option if you want stay flexible compared to hiring new staff.
The downside of independent sales representatives is that they are not employees of the business, so they may not be as reliable or dedicated as a sales force that is employed by the business. They might be selling your products along with products and services of other companies since they usually work for multiple clients which might be your competitors as well.
The Pampered Chef is a direct sales company that offers cooking classes and kitchenware products. The company was founded in 1980 and had annual sales of $1.6 billion in 2017. The Pampered Chef has over 50,000 independent consultants who sell its products through in-home cooking parties. The company has been successful because it has a loyal customer base and its consultants are passionate about cooking and helping others.
4. Online sales
Online sales are made through the business’s website or through online marketplaces such as Amazon or eBay.
Online sales can be a great option for small businesses because they provide a wide reach and a low cost of entry. There are no physical storefronts or sales teams required, and businesses can reach a global market with just a few clicks. We explained a few more advantages about online sales in our previous blog article.
The downside of online sales is that they can be competitive. There are many businesses selling products or services online, so it can be tough to stand out from the crowd.
One example of a small business that became successful by leveraging online sales is the home goods retailer Wayfair. Wayfair was founded in 2002 and initially focused on selling home goods through brick-and-mortar stores. However, the company quickly shifted its focus to online sales and became one of the largest home goods retailers in the world. Today, Wayfair generates billions of dollars in revenue each year and employs over 15,000 people.
5. Catalog and mail order
Catalog and mail order sales are made by sending a catalog or brochure to customers and then taking orders by phone or mail.
Catalog and mail order can be a good option for small businesses because it provides a wide reach and a low cost of entry. There are no physical storefronts or sales teams required, and businesses can reach a global market with just a few clicks.
The downside of catalog and mail order is that it can be slow. Customers may not receive the catalog or brochure for several weeks, and it can take even longer for them to place an order.
L.L. Bean is a real-life example of a small business that became successful by offering a catalog and mail-order service. The company was founded in 1912 by Leon Leonwood Bean, and today it is a multi-million-dollar business with over 100 retail stores.
6. Telemarketing
Telemarketing involves making sales calls to potential customers. The calls are typically made by salespeople who work for the business.
Telemarketing can be a good option for small businesses because it provides a personal touch that can be lacking in other sales channels. When done correctly, telemarketing can be an effective way to build relationships with potential customers.
The downside of telemarketing is that it can be expensive. The business must pay salaries and commissions to the salespeople, and there is also the cost of training and managing the sales team. In addition, telemarketing can be disruptive and intrusive, which can turn potential customers off.
A real example of a small business that became successful by leveraging telemarketing is ServiceMaster. ServiceMaster is a national provider of residential and commercial cleaning services. The company began using telemarketing in the early 1990s to reach new customers and grow its business. ServiceMaster has since become one of the largest and most successful cleaning companies in the United States, thanks in part to its effective use of telemarketing.
7. Trade shows and events
Trade shows and events are opportunities for businesses to showcase their products or services to a large number of potential customers.
The advantage of going to a trade show is that small business owners can meet with other business owners and learn about new products and services that can help their business. They can also network with other business owners and find new customers. By going to a trade show small business owners are able to see new technology and trends firsthand, as well as getting feedback from potential customers. Trade shows can also be a great way to generate new leads and build relationships with other businesses.
The downside of trade shows and events is that they can be expensive. The business must pay for booth space, travel expenses, and marketing materials.
The small business “Cards and Pockets” became successful by leveraging trade shows and events. They sell custom made cards and pockets for invitations and other special occasions. They started out by selling their products at local craft fairs and gradually built up their business by exhibiting at larger trade shows. They now have an online store and ship their products all over the world.
8. Publicity and PR
Publicity and PR can generate interest in the business and its products or services. This can be done through media coverage, word-of-mouth, or social media.
There are many benefits for small business owners in investing in PR and publicity. One of the most important benefits is that it can help you to build brand awareness and create a positive reputation for your business. This can lead to more customers and sales, as well as improved relationships with existing customers. PR and publicity can help you to reach new markets and target audiences, which can result in increased business growth. It can also help you to build relationships with media outlets and other influencers, which can be beneficial in the long run. Overall, investing in PR and publicity can be a great way to improve your business’s chances of success.
The downside of publicity and PR is that it can be expensive. The business must pay for advertising, media relations, and social media marketing.
In 2014, a small family-owned business in the United States, J&D’s Bacon Salt, experienced a huge boost in sales and publicity after appearing on the popular television show Shark Tank. The company had only been in business for two years when they appeared on the show. They had developed a product that was a seasoning salt made from bacon that could be used on any food. The company had only been selling their product online and through a few small retailers. After appearing on Shark Tank, they received a lot of media attention and their product was featured in many major publications. They also secured a deal with a major retailer, which resulted in a huge increase in sales. In the first year after appearing on Shark Tank, their sales increased by 2000%.
9. Joint ventures and partnerships
Joint ventures and partnerships are formed when two or more businesses work together to promote each other’s products or services. This can be a great way to reach new markets and expand your customer base.
There are many benefits to joint ventures and partnerships. First, you can tap into the resources and expertise of the other business. Second, you can reach new markets that you might not have access to on your own. Third, you can save on marketing and advertising costs by sharing them with the other business.
There are also some risks to joint ventures and partnerships. First, there is the risk that the other business will not hold up their end of the bargain. Second, there is the risk that the partnership will not be compatible and will dissolve.
One example of a successful joint venture between two small businesses is a mom-and-pop restaurant that partners with a local catering company. The catering company provides the restaurant with fresh, made-to-order food for its customers, and the restaurant provides the catering company with a steady stream of business. This partnership allows both businesses to focus on what they do best, and it benefits their customers by providing them with a wider range of options.
10. Referral programs
Referral programs incentivise customers to refer others to the business.
Referral programs can be an effective sales channel for small businesses because they are a cost-effective way to generate new leads. They also create a sense of loyalty among customers, which can lead to repeat business.
The downside of referral programs is that they can be time-consuming to set up and manage. Additionally, there is always the risk that customers will only refer people who they think will use the product or service, rather than people who they think would be interested in the product or service.
One example of a successful referral program is the program run by the U.S. retail chain Target. Target’s referral program gives customers a $5 gift card for every new customer that they refer to Target. The program is successful because it encourages customers to shop at Target more often and also brings new customers to Target.
Conclusion
These are just a few examples of effective sales channels for small businesses. The best sales channel for your business will depend on your products or services, your target market, and your budget.
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