The choice of who will preside over a commercial area depends on many factors internal and external to the company

Creating a commercial presence in an area , or improving the existing one, which can follow a series of customers or from a specific geographical area, more or less large, involves relying, in some cases, on sellers or distributors who can present, sell and manage sales and after-sales locally.

Let's take into consideration, among the many examples we could cite, a company that produces goods represented by raw materials or finished products, such as for the construction, plumbing, gardening, etc. sectors.

A new area must be analyzed in advance as a whole , i.e. understanding the presence and impact of competition, the products that are most requested, the size of customers, the possible turnover, the economic cut of average purchases, the problems and costs for logistics, distribution channels and the average solvency of the area.

We can make an initial macro selection by knowing whether our product, which requires transportation from our headquarters to the end customer, can be sold directly and within the timeframe the customer expects at a price that is favorable for both.

If we sell products that do not require a local warehouse, as the value and quantity of goods transported justify the cost of the trip , we can think of a company - end customer sale.

If, on the other hand, quantities, high assortment or supply timing collide with the costs and timing of direct deliveries , it may be necessary to open local warehouses for distribution.

These two hypotheses can already give an indication whether, locally, a sales agent may be necessary or whether one should opt for a distributor who can purchase and resell, in the quantities and times that the end customer requests.

The choice to have a local distributor involves a certain loss of margins on the products , as the company providing the service must be guaranteed a profit on logistics and sales operations.

If these margins do not exist, we can opt to open a decentralized warehouse with a courier or transporter , which will keep our goods in storage and ensure local deliveries at lower prices than the activity of a distributor.

Another aspect to consider is the importance of the presence of the manufacturing company's brand in the reference area, as through the sales action of an agent, freelancer or employee, the dialogue between the end customer and the manufacturer is always direct, if we relied on a distributor the presence of the brand and direct contacts would be lost.

Then, in general, there is the difference in managing the customer base between direct sales through an agent or through a distributor.

The turnover resulting in the distributor's area of competence is the sum of the activities of multiple customers, without distinction between one or the other, without information on the customer's degree of trust, his potential and his needs.

Let's say that this approach to sales could be a simpler way for the manufacturing company, because it can avoid greater commercial management work for individual customers, with the problems that can arise if we multiply the commitment for a certain number of areas in which the company operates.

On the other hand, not having direct contact with the customer can be a deficit in the imposition of one's brand, in order to have information on how the competition moves, what pricing policies they apply, the incentive campaigns that are proposed, and many other things.

From a purely financial point of view , however, there is a risk that concerns the exposure on sales, in fact, considering a delay between purchase and payment of the goods, the distributor works with higher financial exposures than the individual customer, therefore with a greater risk for the manufacturer, and when there were problems related to receipts, it would become difficult not to continue supplying it, as the distributor's customers could be unaware of the reasons why the manufacturer could stop supplies.

In this case, direct damage would be caused to the manufacturer since, not being in direct contact with the customer, he could risk losing him, or worse, the distributor could continue to serve end customers through another manufacturer.

The choice whether to entrust an area to a direct agent or a distributor therefore passes through the analysis of the logistical, commercial, financial and marketing problems, managing to make a decision by weighing the pros and cons of the paths that lie ahead.

In fact, there are products that cannot be sold without a local distributor, others that allow greater flexibility by leaving various hypotheses open, choosing the best for that area, and, finally, goods that can be sold directly without the need for a local distributor.

It is not a bad choice to also get an idea of the sales system applied in the area by the competition , which probably, having started selling in the area first, may have already analyzed the problems, with the same products.

Finally there is a purely technical aspect , since if the product requires substantial technical support for its placement, the presence of a direct agent who can help customers in difficult situations to solve problems can also be a discriminating.