How to optimize your sales network

In organizing commercial networks we proceed on the basis of convictions without scientific references, while digital technologies and new distribution channels impose an organizational re-design . The article provides indications for rationalizing the organization of the networks , in particular, it compares the advantages of a direct network with respect to an indirect one of mono-firm or multi-firm agents.

The importance of the topic is highlighted by the fact that many Italian companies were founded by an entrepreneur with great relationship and sales skills

In management manuals, the problem is presented in terms of size: indirect commercial networks are considered suitable for small businesses , while as size increases, it is better to switch from multi-firm agents to single-firm agents or direct sellers.

All things being equal , typically a direct salesperson is more effective , because they can only focus on a few product lines; but the effectiveness of the sales action does not depend only on the time dedicated.

Multi-firm agents can “influence” customers because they have a wider assortment. Stronger products or brands allow you to drive new products and weaker brands. The breadth of the range , therefore, can increase the agent’s bargaining power . The latter typically has a better understanding of the customer’s business.

With an indirect sales network, mainly made up of multifirm agents, resellers also have the advantage of dealing with a smaller number of interlocutors . External vendors, while less willing to develop marketing activities, nevertheless have more time to spend in the field. Also for this reason, the majority of Italian companies manage the sales networks in outsourcing, using multi-firm agents.

However, they do not have the same degree of product knowledge as direct sellers . Furthermore, they have fewer possibilities of contact with the principal company and are less motivated than direct sellers in informing customers about the characteristics of new products and in carrying out marketing activities. Conversely, multi-firm agents are typically more proactive , have more experience and have very close ties to top retailers. Too often, however, they have an interest in promoting only products that ensure a more favorable margin/time invested ratio.

A commonplace to debunk is that the transition from a network of agents to direct sellers involves limited and easily controllable costs . Often the result is the opposite.

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