Indirect sales mean that a manufacturer uses external sales partners to sell products or services to the end customer.
The major advantage of indirect sales is the exhaustive geographical market presence linked to relatively low capital commitment. External sales units can be categorized into distributors (e.g. wholesale, retail) and intermediaries (e.g. sales representatives, commission agents). Distributors are commercial companies acting in their own name and interest. In contrast, intermediaries do not acquire ownership of the distributed products. Conversely to direct sales, external sales partners are not bound by instructions and can only be controlled by the specification of legal framework conditions or incentive systems. A central aspect of indirect sales is therefore the selection of external sales partners. These are often selected based on a variety of qualitative (e.g. sales know-how) and quantitative (e.g. market share) criteria.