Q: My company sells specialized drones for commercial use. We would like to grow sales in Minnesota and the Midwest. Should we first have direct sales in that region, and then find a distributor? Or should we first solicit distributors and offer them incentives?

Seshu Kiran, CEO
XAir

A: Two factors should influence your decision: Your control over how the product is sold and the most efficient way to deliver your product to customers. If you want to define the messages and service level for prospective customers, you need a strategy that gives you that control.

If you are looking for the most cost-effective way to reach customers, a different strategy may be needed. Successful distribution strategies balance the trade-off between control and efficiency.

Distributors represent multiple products from different manufacturers to buyers, usually in a specific industry. They are knowledgeable about industry conditions and trends, and have relationships with industry buyers. Distributors' market knowledge and access to customers can be very valuable.

But distributors have a full portfolio of products to sell and limited time in front of a customer, so they may not be willing to try selling a new product from a new company.

Since distributors have other products to sell and make their commissions, you have to give them a very strong (i.e., expensive) incentive. Once you provide incentives, it is difficult to pull them back.

For your product, you need more control, so direct sales are the better option. Your own sales staff are the best people to explain the value of your product and instill confidence in a potential buyer that your product and company are a safe buy.

Your salespeople should identify early adopters who place a high value on what your product can do for them, craft specific messages and provide the support that appeals to these customers.

Having control over which customers are targeted, messaging and support services are key to your initial sales.

After you sell the early adopter customers, other customers will be more willing to look at your product.

Mark Spriggs is an associate professor of entrepreneurship at the University of St. Thomas Opus College of Business.