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Direct Selling Would Become an Important Marketing Channel for New-Type Fertilizer Companies

China Agriculture Report By CnAgri2017-10-17 10:03:38China Agriculture Report Print At present, new-type fertilizers selling channels mainly are dealers, direct selling and governmental procurement. Of which the proportion of operating revenues of selling to dealers is upward of 50%; the proportion of operating revenues from governmental procurement ranges at 30%-40%.        
Because of a small scale, new-type fertilizer companies have a weak ability of exploiting markets. At the previous stage, the main ways to exploit the markets are dealer channel and governmental procurement, but traditional dealer channels have the features of many links and low profits, however the channel of governmental procurement has the problems of fierce competitiveness and a drop in market share. For example: owing to a drop in organic fertilizer orders from government in 2017, Fujian Haoyujia’s operating revenues decreased by 15%; Jinggeng Tianxia’s operating revenues descended by 41.6%.                                                                             
In the last two years, some new-type fertilizer companies have set up special departments that directly cooperate with new-type operating players (large growers, cooperatives and agricultural companies), of which the proportion of the revenues from direct selling is gradually increasing and has reached to 5%-10%. Direct selling can save companies’ costs and increase the ability to control risks.
It was predicted that the proportion of direct selling would be gradually ascending and it would become an important marketing channel for new-type fertilizer companies.

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