And this is just another way you can think about this strategy or decision. And I look at this being another VSA. So this is a specialized VSA to channel, to B2B channel. And we have to start out with a vision of the kinds of services you want to satisfy with your B2B buyer. But then you have to take a cold hard look as to how capable you are in terms of being that service provider. Again, in B2B, sometimes the answer could be you. You can directly provide all of those services. So, 3a is going direct, again, which assumes that you are very capable but, unfortunately, that's not always the case. So, if your capability is low, you have to go indirect. And, again, depending on how general, or comprehensive that help needs to be, you can go full function. Again, if you are reasonably capable but the lacking in certain kind of a service providing capability that’s when you can afford the more limited function of development. Okay. Related to this of course is cost and channel involves a lot of cost, a lot of different kinds of costs. So, here, we can think about two types of costs. One, which is fixed, and that's what setup cost referred to, and one which is variable, which is more indicative of indirect channels. So as we can see here your choice of going direct of Indirect involves different kinds of cost Almost opposite kind of cost. In the case of direct you have high fix percent of cost, but lower variable cost because after all, they're your own personnel. Conversely, the case of indirect channels, the set of cost may virtually, very minimal to what to speak of. But look at how high the variable cost will be so the ultimate arbiter of which channel to choose will be your expected potential market size, which I have pointed as being x. So that is sort of the break even point, where beyond x It serves you to go direct. Because that's cheaper but before that you will be much better served by taking a safer, indirect channel. Okay, let me get out of that way. [LAUGH] Okay, so this is just a simple worksheet I think that you can use to map out not only what the demand situation is like, but also what the supply situation is like. That's a part of being not only you, which is indicated here as R capability, but also that of the middle men. So, given the priority that is demanded from the market and that's reflected in the weights of the service needs. And in this assumed example it could be a very high-tech product and therefore the technical support may be crucial. And because it's new maybe the initial selling support, that too has to be quite good. So when we access all our capability, we see that we only rate high in terms of technical support and that's only natural because it's our product and it's new. Unfortunately we may not have the selling support everywhere. Maybe that song of support has to be localized. And if we're a small operation just entering into the international markets, that's where we need backup from another middleman. We can choose the distributor, because he's high and at least moderate everywhere. But notice that, in terms of technical support, he not as good as we are. So even though he can help in terms of selling support, and even service consistency and quantity, in the crucial technical support area, that's where we still have to do it. So maybe a better option is to have maybe a dual-channel, a hybrid channel, where we provide the technical support. But in terms of the selling support, that's when we can solicit the help of a manufacturing representative and maybe that selling support is not as technical. And therefore, even though, the manufacturing rep, may not have that technical expertise, nonetheless, he may have an adequate level of selling support. So, maybe, the conclusion that we can reach here is that we combine our channel, direct channel, in terms of providing that technical support. Back it up with selling support by the manufacturing rep, and in terms of maybe even quantity, in terms of maybe local assembly, get help from maybe a local producer who can assemble for us, and correct for the kind of quantity that's demanded in the market. Okay, so in terms of the takeaways for this segment, we learned about how place starts with the buyer and what his service needs are. And we learned how in contrast to B2B, direct marketing is a possibility. But that's not always the case and if that's true, that is when we need help from middlemen. We also learned that distribution involves different types of costs. And so market sides will tell us what kind of costs makes sense for us and last but not least, I showed you a very simple, and I hope useful, worksheet which will help you align your demand situation with you supply situation.
