The challenge for manufacturers has been in deciding whether partnering with other companies to attract customers and supply products to them would be beneficial. When it appears that a company can apparently benefit from the help of an intermediary, the next challenge is to decide which companies to partner with. Sales representatives sell expensive products to their customers on behalf of multiple manufacturers, reducing direct sales costs for manufacturers. Retailers, or resellers, display products from many companies to make shopping easy for their customers. Distributors warehouse large quantities of a manufacturer's products and ship small quantities to many retailers.
Some intermediaries facilitate the relationship between seller and buyer.
Others want to stand between seller and buyer, keeping the seller from developing a relationship with the end customer. It's permanent, because manufacturers of relatively low-priced products can't afford to sell directly to customers, while retailers thrive on selling products from multiple manufacturers. Early on, some thought that the Web would make selling so inexpensive, automated, and easy that consumers could be encouraged to buy directly from manufacturers and that manufacturers could make a profit selling directly to consumers. One question a manufacturer needs to ask is whether it even needs to develop relationships with every consumer. Sometimes it's best to sell directly to a small number of large customers and take orders from the distribution channel for small customers.