Practical guide on sell in (sale to distributors) and sell out (sale to consumers). Tips and methods to boost your commercial performance.
Sell in, sell out... Do these marketing terms mean something to you but you don't know exactly what they mean? Don't panic, we'll explain everything to you! Understanding and mastering these concepts is essential for developing a successful business strategy. Ready to boost your sales and optimize your distribution?
What exactly are sell in and sell out?
Let's start with a clear definition of these two complementary concepts:
- Sell-in refers to sales made by a brand to its distributors. This is the stage where you need to convince retail outlets to list your products.
- The sellout corresponds to the sales of these distributors to the end consumers. This is where your products are put on the shelves and purchased by customers.
Let's take a concrete example to better understand. Let's say you're a cosmetics brand. Selling in is when brands like Sephora or Nocibé order your latest lipsticks. Selling out is when a customer then buys this lipstick in one of these stores.
This distinction is essential because the levers for “selling to your customers” (sell in) or “selling your products” (sell out) are not exactly the same, as we will see.
However, the two are closely linked: products that sell well in stores (sell out) facilitate referencing and orders (sell in), and vice versa!
Sell in: convincing and retaining distributors
Succeeding in your sell-in is a major business challenge. Distributors are your customers, the ones who buy your products and put them on the shelves. Without them, it is impossible to reach the end consumer! But how do you convince them to reference you, rather than the competition?
This requires a lot of work beforehand to identify and qualify points of sale, in line with your positioning and your targets. Will your products sell better in supermarkets, pharmacies, specialty stores? Study the specificities and requirements of each distribution channel.
Then, you have to build an unstoppable argument to demonstrate the interest of your offer. Several promises can hit the mark with a buyer:
- A qualitative product with a good quality-price ratio
- An impacting point of sale activation plan (promotions, POS, entertainment...)
- An attractive margin and advantageous commercial conditions
- Upscale and cross-selling opportunities
- Excellent support and customer service
To maximize your chances, also anticipate objections (too high price, little-known brand, saturated market, etc.) and prepare answers.
Do not hesitate to rely on consumer studies, customer cases and reassuring proofs of concept.
Finally, take care of your sell-in tools, especially your sales presentations. They must be striking, synthetic and illustrated (packshots, videos, key figures...). Depending on the brands and the interlocutors, adapt your speech and highlight your differentiating assets.
Tips for a winning sell in:
- Work on your elevator pitch and repeat it before each customer appointment
- Offer attractive incentives (entertainment budget, combined operations, etc.)
- Cultivate a real close relationship with your sales partners
- Regularly challenge your referenced positions, brand by brand
- Train and involve your sedentary salespeople in the challenges of sell-in
By applying these best practices, you will put all the chances in your favor for convince new distributors and retain your current customers. But once on the shelf, you will have to transform the test. That's where sell-outs come in!
Sell out: trigger the purchase by the end consumer
Your products are now well referenced and well displayed at your distributors. Congratulations, it's a first victory! However, everything remains to be done. The challenge now is to encourage consumers to pick up your products on the shelf and make a purchase. That's the whole point of sellout actions.
Merchandising, promotions, POS but also customer advice are your best allies to boost your store rotations. A good sellout strategy will be based on a coherent mix of in-store and online levers:
Checklist of sellout essentials:
- A multi-channel promotional device (web, stores, drive...)
- A regular entertainment plan (games, tastings, demos...)
- Impacting merchandising (facing, theatricalization, cross-selling...)
- Sales support tools for customer advisors
- A strengthened media presence (poster campaign, partnerships, etc.)
The objective is for your brand to attract the eye on the shelf, make you want and encourage people to buy. Also, don't forget the post-purchase period: a customer who is happy with the product and their experience is your best ambassador. Imagine devices to extend the relationship (user club, sponsorship program, etc.).
Selling out is also a great source of insight into the behavior of your consumers: who buys your products, when, in which stores? All this valuable data to optimize your marketing strategy but also your distribution coverage!
Sell in, sell out: an approach to be managed jointly
As you can see, sell in and sell out are two sides of the same coin. Your sales performance is ultimately your ability to sell to your distributors AND to make your products sell to their customers. A double challenge that must therefore be the subject of joint and coordinated management.
Monitoring your sell in and sell out figures has multiple benefits:
- Understanding demand and market trends
- Analyze your performance by circuit and by brand
- Identify possible points of friction in distribution
- Adjust your commercial and marketing action plan
- Objectify your exchanges with distributors
It is also the best way to streamline its distribution and identify new growth drivers. For example, large volumes on a sellout reference may justify an increase in orders and in the allocated linear when selling in. On the other hand, stocks that accumulate in stores due to lack of rotations should alert us to a possible future de-referencing.
To be really relevant, your sell in and sell out indicators must be analyzed cross-analyzed. An interesting ratio to monitor is sell through, which compares your customers' orders (sell in) to their consumer sales (sell out) over a given period of time. The higher this rate, the better: it means that your products flow easily!
Others KPIs can help you fine-tune your sell in and sell out performance:
- The number of active references
- Sales and volumes sold by product
- Digital distribution and value
- The depth of range and the 80/20 calculation
- Margin and promotion rates
Increasingly, these KPIs are accessible directly via your distributors' portals. Be sure to follow this data as finely and frequently as possible, ideally by brand or even by store. This is essential to adjust your action plans as close as possible to the field.
Category management and revenue management: essential approaches
To jointly boost your sell in and sell out, two marketing approaches can make a difference: category management and revenue management.
Category management consists in managing a product category as a fully-fledged business unit, in partnership with its distributors. The idea is to optimize the turnover and the margin of this category as a whole, beyond its brand alone.
In concrete terms, this means:
- A proactive definition of trends and insights in the category
- Assortment, merchandising and promotion recommendations
- Co-construction of categorical action plans with retailers
- Item performance monitoring and competitive analyses
Rather than remaining in a “push” logic, this approach will allow you to be in line with market expectations and to differentiate yourself through your expertise. It is a great way to strengthen its impact in stores... and optimize its order volumes!
A complementary approach is that of revenue management, directly inspired by the aviation sector. The challenge is to optimize its turnover by jointly activating price, promotion and assortment levers:
- Segmentation of its “value” portfolio and price elasticities
- Definition of a price list according to the circuits and periods
- Tactical management of promotions and promotions
- Optimization of quantities and restocks by point of sale
Such an approach is particularly relevant for products with strong competition and a short lifespan (fashion, high tech, etc.). It does not replace a good brand strategy, but it can help maximize sales on each reference.
To implement such an approach, data and digital tools are your best allies. Sales and stock histories need to be analyzed finely and regularly to simulate different scenarios. It is then a question of developing “tailor-made” recommendations per brand and per store, according to the catchment area, customer profiles, seasonality...
Involve all your teams in a 360° strategy
The other essential element for a successful sell in and sell out is the mobilization of the entire company around a common strategy. Too often, sales (sell in) and marketing (sell out) teams work in silos, without real coordination. This is harmful because their expertise is complementary!
“Key account” salespeople have a detailed understanding of distributors' expectations and constraints. Category managers follow market and consumer trends. As for product managers, they are in the best position to talk about customer benefits and benefits. Success is in the synergy of these different perspectives.
Some best practices for aligning your teams:
- Sharing sell in and sell out results within the company
- Building joint trade and marketing action plans
- Involve marketing in advance of commercial negotiations
- Mobilize category management on transversal missions
- Regularly challenge its systems with ad hoc studies
- Measuring performance on shared indicators
- Celebrating successes together and sharing best practices
Your teams must acquire a 360° vision, based on consumer AND shopper insights. It is under this condition that your company will develop differentiating and impacting devices, at all stages of the purchasing process.
Build a win-win relationship with your retailers
As we said: to boost its sellout, the commitment of its distributors is essential. But how do you create a positive and lasting dynamic? That's the whole point of Maslo “Loyalty” module. The idea: set up a personalized incentive program for your retailers, which rewards their efforts to promote your products.
Sales challenges, product training, sharing of best practices... The platform allows you to set up tailor-made engagement mechanisms, according to the profile and potential of each reseller. The key for them: attractive rewards (bonuses, training, exclusive benefits, etc.). And for you: a highly motivated distribution network to boost your sellout!
With Maslo, you can:
- Segment your distributors and define appropriate objectives
- Launch challenges and monitor performance in real time
- Put your retailers in competition (rankings, points...)
- Automate the awarding of rewards and feedback
Conclusion
As you can see, perfect control of your sell in and sell out is the key to boosting your sales! This requires a 360° strategy that is data-driven and mobilizing all your teams.
Your objective: to be the essential partner of your retail customers... and the preferred brand for end consumers!
