As the name suggests, corporate sales can be defined as the selling of a product or service to a business or an organization. In such cases, the deals are more often than not bulk deals, and a bulk discount is passed on to the buyer or in this case, corporates.
Incorporate sales, the buyer is always a business or an organization, and the seller can be an individual entity or a company or an organization.
The concept of corporate sales is similar to any other sales. In this, there is a buyer, which is a business or corporation, and a seller who may be an independent business owner or an organization. The fact that even large enterprises have needs and have to purchase their materials – may be raw materials or processed items – from different businesses gives rise to the concept of corporate sales.
For example, every office requires stationary like paper. A company manufacturing paper will also need to use paper for themselves. And so does a company that is into manufacturing printers involves paper. So the company manufacturing paper – lets name it Company A – will sell the paper to the printer manufacturing company – Let’s say Company B. This transaction will be termed as Corporate Sales.
In return, the printer manufacturing company can pay by selling equivalent printers to company A, but that will be the call of Company A and the nature of the deal. Such deals happen all the time in every business and are usually on a contract basis for the long term. These deals may also be with different manufacturers providing raw materials to the business for producing the end product or between two conglomerates regarding the sharing of resources, but both participating parties ensure that they have sufficient profit after the deal.
Corporate sales are often classified as a win-win situation for both parties involved.
Importance of Corporate Sales
- Corporate sales are the only way in which companies can purchase in bulk from a seller, and when the transaction involves such a vast volume, discounts are offered over the purchases. This turns out to be profitable for the buyer party.
- Like the buyer, even the seller profits through the deal as the bulk of his products are consumed in less time, and he gets to work on the next bulk.
- It is a profitable venture for both parties and ensures long-term business for the seller. This also ensures that the regular supply of products is provided to the seller without interruption.
- Corporate sales have transparency in their transactions, which is very useful for both of the businesses of the buyer as well as the Seller.
- Because the orders are placed in bulk, the utilization of stock is faster as well as the requirements can be customized according to the need of the buyer. The product variant may or may not be available in the market for everyone, but it is customized for this select group of buyers. This is possible because there may be a large number of buyers in corporate sales, or the requirement of the product might be in large quantities. For example, a company will ask for custom-made shirts for their employees. In this case, the number of shirts that are required would be more than an ordinary reseller would order, which is why the buyer can customize the shirt according to the requirement by printing the logo of the company or the product name. In another scenario, a company may buy vast quantities of a product from the seller. The deal may be a one time offer or a long term purchase. In either of the cases, the seller has to ensure that the required stock of products is made available to the buyer at the required times.
Advantages of Corporate Sales
- Repeat business: For the seller, if the deal goes well, it would mean repeat business and fixed customer. Repeat business is a fixed business and contributes to a stable baseline of the income statement of an organization.
- Bulk deals: corporate sales involve bulk deals that are beneficial for both buyer and seller. It comes to be very cheap for the seller, while the business quantities are useful for the seller.
- Employee benefit: Products and services which are provided to employees are under a big and long term contracts. This enables the employee to use premium products at a low cost. For example, iPads are given in many organizations for work purposes. The employee uses the product professionally but may find it useful and also purchase it for personal use and thus benefit from the product or the service.
- This is true even in case of services like many employers provide Group Insurance policy for their employees. The employee may also purchase the insurance policy for himself after his employment period has ended with the employer.
Disadvantages of Corporate Sales
- Corporate sales are All or None sales. If everything works well, then the sales will generate massive revenue for the seller, but if even one thing goes wrong and the contract terminates or if the buyer finds an alternate seller with a low price, then the current seller may not get anything.
- To initiate the sales with corporates is a monumental task. Large corporates may not be easily convinced with your offering, in which case it would require a smart person to crack the deal. Corporates don’t meet often, and even if they do, the seller may find only one chance to convince the buyer, which may or may not go well. Hence corporate sale is a tough nut to crack.
- Exceptionally well-qualified salespersons are required for jobs of corporate sales. People who can build relations have excellent mastery over communication and preferably have useful contacts or networks are to be hired, and it is no brainer that such people don’t come for less salary. They need to be paid handsomely, which is a cost to the company.
- Sometimes keeping up with corporate sales require a lot of effort on the part of the seller. The orders are random, and the seller has to adjust the manufacturing and supply processes of his organizations according to the needs of the buyer, and it may not turn well every time.