The purpose of this information is to assist you in obtaining an optimal result when you engage an intermediary. Choosing the right distribution channel for your business is critical, and ensuring that you understand the process and have a documented agreement will assist in the development of a mutually beneficial relationship. The checklist is designed to prompt you with questions and hints that should be considered when engaging intermediaries. Deciding to use intermediaries will determine to a large extent, where you will focus your marketing activities. For example, you may decide to focus your advertising, sales promotion and pricing strategies at generating trade interest and demand for your products, or you may focus these activities on consumers.
Most organisations use a combination of both, with the balance lying more one way than the other.
In general, the longer the chain between provider and consumer, the less communication between the two and the higher the purchase price of the product to the consumer. Engaging intermediaries allows you less control over delivery to your customers, but also allows you to focus on your core competencies. Having intermediaries can present opportunities for you to share promotional costs. Depending on what you negotiate with the intermediary and which type of intermediary you engage, you can pass on the worry of storage, adjusting stock quantities, establishing sales offices in various geographical locations, and bearing the cost of add-on services. A major disadvantage of using intermediaries, particularly agents who don't take title to your goods, is that you are reliant on their enthusiasm and knowledge of the market.