Sales Related Guides
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Channel conflict is a situation whereby sales channels for the same product or service compete with each other in unproductive ways. This can result in competitive discounting, loss of sales partners and customer satisfaction issues. The following are illustrative examples of channel conflict.
Ecommerce & RetailA brand sells directly by ecommerce and through a network of retail shops. Many of the retail shops are independently owned sales partners. Steep discounts on the ecommerce platform cause sales to drop at the retail shops. Customers commonly use the shops to try things out and then go online to buy. This causes retailer partners to revolt resulting in poor customer service, bad press and lost partnerships.
Wholesales & RetailA manufacturer sells to wholesalers and retailers directly. A wholesaler is unhappy that the manufacturer sells directly to one of their largest customers and threats to drop the manufacturer's products.FranchisesAn independent owner successfully operates a restaurant franchise for many years. Suddenly, the restaurant chain allows two more franchise locations within close proximity to the established restaurant. Sales decline and within two years all three locations are out of business.
ResellersResellers engage in aggressive pricing and provide poor customer service that damages brand value and results in poor reviews on ecommerce sites. This damages sales across all other channels including wholesale, retail and ecommerce.
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