Notes for owners · Channel and customer growth
Dealer first or direct first when you enter a new state
A dealer gives you reach in a new state and keeps your buyers' names. Selling direct keeps the names but needs a person who follows up. How to choose, and when to do both.
The GullySales team · Updated 17 Oct 2026 · 6 min read
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"A dealer in Hyderabad wants the whole of Telangana. Should I give it to the dealer or sell direct first?" Go through a dealer when your buyers are many and small, buy on credit from local stock, and you have nobody to follow them up. Go direct when the buyers are few enough to name and large enough to visit, and you can put one person on them. A dealer buys you reach and keeps the buyer's name in the dealer's book. Direct keeps the name, but only if someone calls.
What a dealer gives you, and what you hand over
A good dealer brings a counter, a godown, credit to the local trade, collections, the local language and a face the buyer already knows. You could not build those in a new state in a year.
What you hand over is the buyer. The dealer's customers are the dealer's customers, and many dealers will not share the list. You may never see who bought, how much, or why they stopped. When the agreement ends, or a rival brand offers a better margin, the buyers can go with the dealer. You also hand over the price the buyer sees, because the dealer sets the discount. How to tell, before signing, whose customers a dealer or agent really holds is covered in our note on choosing a local agent or partner.
The biggest thing owners give away is territory. "The whole of Telangana" sounds like reach. In practice a Hyderabad dealer stocks what moves fast in Hyderabad, and Warangal and Karimnagar hear about your product from nobody.
What direct costs you that the dealer was quietly paying for
Direct looks cheaper because there is no dealer margin. But the margin was paying for things you now carry yourself: credit to buyers you have never met, collections from a distance, freight on small orders, and stock close enough to deliver on time.
It was also paying for follow-up. A direct enquiry from Nizamabad with nobody to call it back is worse than having a dealer, because that buyer has now met your brand and been ignored by it.
The two routes side by side
| Question | Points to a dealer first | Points to direct first |
|---|---|---|
| How many buyers are there? | Hundreds: shops, contractors, carpenters, workshops | A few dozen plants, hotels, builders or institutions |
| How do they pay? | On credit, settled with a local trader they know | Against a purchase order, sometimes with an advance |
| What size are the orders? | Small and frequent | Large and occasional |
| Does it need a demo, installation or service? | No, the counter staff can explain it | Yes, your engineer has to present it |
| Who will follow up? | The dealer's counter | A named person on your team, with time set aside |
| Do you need the buyer's name later? | Not if reorders come through the counter | Yes, if spares, consumables or service contracts follow |
If most answers sit in one column, the decision is made. If they split, read the last two rows again. They carry more weight than the rest.
A rule to start with
Sell direct to the buyers you can name before you arrive, and appoint a dealer for the trade you cannot name.
Before entering, write down every buyer in the state you could reach yourself: from your enquiry log, from your existing customers' branches there, from the trade directory. They go on your own list with one person responsible. For the counter trade, find a dealer and give a district or two, not the state. Put a review date and an agreed target in the agreement, and a line saying warranty registrations come to you. Your lawyer will word it. The point is to keep one way of knowing who your end buyers are.
Do not go direct if nobody will follow up. A brand that answers enquiries a week late is better off behind a dealer who answers the same afternoon.
For example: hinges from Rajkot in Telangana
This is an invented case. A Rajkot maker of cabinet hinges, drawer channels and handles enters Telangana. The buyers are hardware shops and the carpenters who decide what goes into a kitchen. That is a dealer product: hundreds of small buyers, buying on credit across a counter.
The owner's mistake is exclusivity. One Hyderabad dealer gets the whole state, stocks the fast-moving hinges and ignores the soft-close channels that carry the margin. Hardware shops in Warangal and Karimnagar never see a salesman. When the owner asks which carpenters are buying, the dealer has no list to give and no reason to make one.
At renewal the owner redraws the map. The Hyderabad dealer keeps Hyderabad and Rangareddy, with a target for the full range. A second dealer is appointed for Warangal, and takes six months to stock properly. The maker runs carpenter meets in both districts with the dealers present, and collects the carpenters' names at the door. Now the brand has its own list of the people who choose the product.
An Ahmedabad maker of industrial dust collectors entering Tamil Nadu gets the opposite answer. Its buyers are foundries and cement plants, few enough to list from a trade directory, each needing a site visit and an engineer. A dealer would add a margin and a middleman between the engineer and the plant. Direct comes first, with one person based in Coimbatore or Chennai.
Can you run both at once?
Yes, and manufacturers settled in a state often end up there: direct for named accounts such as builders, OEMs and institutions, dealers for the counter trade. It works only when the split is written down. Which accounts are yours, which are the dealer's, what happens when one of your builders buys from the counter, and whose price applies. Without that page, both of you quote the same builder, and the builder plays you against each other.
Dealer development is the visits, counter display and scheme tracking that follow a dealer appointment, so each dealer sells the range rather than three items from it. Route to market and distribution strategy is the larger version, when several states are involved. Our state pages describe the trade towns in each state.
Start with two columns
Write down the buyers in the new state you could name today, and next to each, who on your team would call them. If the list is long and the second column is full, start direct. If it is short, or the second column is empty, start with a dealer, in a district, with a review date. Bring that list when you tell us what you need.
