Reasons why a producer may prefer to sell directly to consumers.
- Financial strength. Can use own retail outlets established in the market.
- Number of established /regular customers. If the established number is low, then direct sales are viable.
- Perishable goods. There is need to reach customers fast to avoid spoilage.
- Technical goods. So that he can demonstrate how they are used.
- Feedback required. In order to get quick response from the customer about their feelings on the product.
- Scale of production. When the producer has a small amount of output can sell directly
- Need to keep prices low. Producers may want to control prices and keep them low by avoiding middlemen.
- Customer specification. If customers order goods directly, then direct sales are done.
- Concentrated markets. Where large markets are concentrated and accessible, then direct sales can be done.
- Government policy. When the government dictates that direct sales be done
- Sensitive goods. To be handled by producers themselves direct to consumers.
- Nature of the consumers. If customers can afford to buy large quantities, then direct sales can be done.
- Profit maximization. Producers may want to by-pass middlemen to leap maximum profits from direct sales.
- Level of competition. If there is stiff competition, the producer may sell directly to consumers to capture the market and outdo other products of competitors.
- When goods are quite expensive for middlemen, then the producer has no option but shoulder all the sales direct to consumers.