Are you looking to expand the sales of your consumer electronics company? This guide helps you consider expanding your distribution beyond your website and into new global markets via new channel sales opportunities — online and offline.
Once your product is ready to be sold to end users, the next step is to define where you want to sell it. My best advice is to bring distribution into your business plan from the ground up.
I often see vendors investing a lot of effort — and money — into their websites.
Of course, having an appealing website is essential. But if you’re entering new European markets, the more complex your website, the more difficult it will be to localize it.
A good website won’t be a hindrance either if you’re selling to third parties since they see it as sane competition and value the effort from the brand to advertise their offerings. After all, some buyers will always google you and check out you’re website.
But what’s also almost always true is that you’ll need to sell on other platforms sooner or later — your homepage won’t be enough forever.
Working with consumer electronics channel sales partners opens a world of opportunities for growth and success.
And sooner is better than later for many reasons, from living another day if you are a startup to reaching profitability to convincing investors when you need to raise funds to expand.
I guess the main reason tech founders wait to do distribution is that it’s such a pervasive myth that if you ‘growth hack’ your way into it, you can become the next success story in consumer electronics.
It could happen like Peloton, which was created 12 years ago and still has an integrated distribution — but even their business model needed rolling back after a lockdown boom. And this is just the tree hiding a forest of companies gone bust because they failed to expand during their infancy. And even then, how could we be sure it wouldn’t’ have been profitable and sustainable for them to sell elsewhere?
I’m working with a company, coincidentally also created in 2012, that started doing active distribution four years ago. While I can’t share too many details about this in terms of numbers, I can say that they are happy with that decision as it’s been a key driver of their more recent scalability.
You may think retaining your margin and investing what you’d give to third parties in marketing may let you sell only on your website. This is, again, what many founders do — and it’s a big risk, putting all your eggs in one basket that risks sales and customer acquisition. This website-only approach takes a lot of time since you must build awareness for a new brand — and compete with third parties (retailers, competitors, marketplaces, etc) with increasingly AI-driven search engine optimization (SEO).
As a founder of a Consumer Electronics company, time is probably something you do not have.
Instead, suppose you are willing to invest in selling to third-party channel partners. In that case, you’ll likely be guided into the best places for your products and get revenue quicker since those locations already have traffic and consumers with potential interest in your product. This is especially true when you are looking to enter new countries where you likely don’t have a known brand or existing relationships yet.
My first senior experience was with a company doing everything it could to sell on its website instead of harnessing the power of mass distribution that retailers enable. In the meantime, our then-competitor with a similar offering did the exact opposite and focused on retail — so much so that even its press releases concentrated on quoting the number of stores it was in. Eventually, my company struggled to survive, and the competitor sold to Google for $2.1 billion.
Another cause of hesitation is fear. I’ve talked with many founders who have proficient knowledge and skills, but know nothing about distribution. My advice here is simple and would be the same for any field that becomes technical: trust the expert. This will give you the confidence to navigate any uncharted territory. And you will come off as more knowledgeable when talking to investors.
Even after 15 years working in this field, it’s still a privilege for me to talk to CEOs who go against strong headwinds to do hardware — probably the most challenging thing to sell — and walk them through the best way to sell their products outside their website.
The good news is that baby steps work in this approach — selling on third-party marketplaces, which anyone can do, will bring you revenue. One of the best examples is Anker, a mobile phone accessory company, which reached $1 billion in revenue selling only on the Amazon marketplace.
Then there’s brick-and-mortar retail. Again, I believe a good channel sales partner can take you anywhere and swiftly — so long as they have the local partnerships in order to make that happen. I remember being stuck in a foreign country for two years, trying to do everything myself with sub-ideal partners. Then, I hired a team of channel sales experts with existing local channel sales relationship who opened a whole new international market with the Top 10 retailers in just six months.
Fourteen years ago, that experience made me want to become an expert in channel sales for consumer electronics, helping vendors achieve success with distribution and sales to third parties.
Success in channel sales — and global expansion in general — relies on relationships. We’ve got that. Our channel sales team at Sales Force Europe can provide you with the best guidance for your brand.
In an upcoming blog post, I will focus on what ‘best guidance’ implies.
There are many topics to tackle during the first discussions to prepare and harness the power of third-party distribution.
Thanks for your attention. You can always connect with me on LinkedIn if you want to learn more.
