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Indirect Sales

Indirect Sales is the process of a vendor selling through partners (one or multiple levels) to either business end customers or consumers.
The topmost level usually is called distributor and often also provides the required logistics service for the German market. Broadline distributors focus more on the logistics service plus their reseller relationship. Huge distributors have more than 6,000 German resellers who buy at least once every month. Difficult products can be sold through Value Added Distributors (VAD). They need higher margins but are able to train resellers and provide the presales services needed.
The layer below often is named as reseller. This can be a system integrator, computer shop or other company selling IT products, services and solutions. Some use the vendors product as part of their own solution (adding at least consulting and/or customizing), others are only box movers.

related resources:

Advantages

  • distributors and their resellers already have client relationship
  • reduces the required German team size 

Disadvantages

  • distributors and resellers both expect their margins
  • no direct touch with the end user (influences feedback and customer loyalty)

Who should do so?

If the product is too difficult, resellers and distributors are not able to handle it. Even VADs are very limited in their possibilities to support a difficult solution.
C-brands are usually not accepted by German distributors. The biggest only accept A-brands. Distributors expect serious marketing activities by the vendor (pull) before they agree to add the product. An exception is a new product without recognized competition.
Products with low margins usually do not fit well in a hierarchical sales structure.
Many foreign vendors thought that indirect sales could work if they find a (or multiple) reseller on a trade show and then leave that reseller alone in the market. This brought the bad image to this sales approach. A succcessful market entry in the indirect channel requires a local team in Germany managing these resellers:
  • budgeting and forecasting with the partners
  • micromanagement and support in single deals
  • marketing (pull activities)
  • support (collateral, presales, postsales, lead generation)

How to find the right German Partner?

Finding the right German Partner without a local German contact can be difficult. One of the German contacts who are able to help is:

Aleksandra Sadowska
Enterprise Europe Network Hessen

HA Hessen Agentur GmbH
Internationale Angelegenheiten /
International Affairs and Economic Development
Abraham-Lincoln-Str. 38-42
65189 Wiesbaden, Germany

Fon: +49 (0) 611 774-8957
Fax: +49 (0) 611 774-58957
E-mail: aleksandra.sadowska@hessen-agentur.de
www.een-hessen.de

EEN Hessen has an excellent contact network to companies in Hessen, which is one of the 16 German states. They are funded by German public authorities. therefore their services are free.

SELLto.de: B2B Sales Outsourcing
2010-05-25
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