When suppliers bring products or services to market and sell them through channel partners, channel partners will get a certain percentage of sales as commission. This kind of commission is usually calculated according to a certain proportion or a fixed amount, and the specific amount can be determined according to the cooperation agreement and agreement between the two parties. Distribution commission is an incentive and reward mechanism for channel partners to encourage them to actively sell suppliers' products or services and promote market expansion and sales growth.
It can be regarded as a cost in the supply chain, which embodies the mutually beneficial relationship and cooperation mode of all parties. The distribution commission can be paid at regular intervals or after reaching a certain accumulated amount, and the final payment method can also be cash, discount code, gift card, coupon and other forms. Distribution commission is a marketing method that can help merchants expand sales channels and increase sales, and it is also a way for dealers or agents to get extra income.
Distribution types are:
1, direct distribution type
This distribution model is that manufacturers sell goods directly to consumers, and there is no middleman to earn the difference. The advantage is that consumers can buy goods with high cost performance, and as manufacturers, they can also sell better prices. However, this model also has some defects. After all, manufacturers have limited personal channels, so this distribution model is more suitable for some high-priced products, such as large machines or machinery.
2. Personal distribution mode
This distribution model has become more and more popular in recent years. Although personal connections are limited, if we can combine our personal connections, we can achieve higher value. Personal distribution mode is to let individuals become agents and make profits after selling goods through personal channels. However, subordinates recommended by individuals can still enjoy profit sharing, which is secondary distribution.
Above content reference: Baidu Encyclopedia-Distribution