Reasons why a producer may prefer to sell directly to consumers.
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.
