What are Primary, Secondary and Tertiary sales?

A typical supply chain involves three stakeholders before a product reaches to end consumer: a) Manufacturing company/National supplier, b) Distributor and c) Retailer, and sales transactions at each level are given different titles: Primary, Secondary and Tertiary Sales.

  • Primary Sales – Primary sales is the sales from a manufacturing company or national supplier to a city/state/region distributor. For example when a brand is invoicing the product to a distributor in one city, who will further sell it to retailers, is called as ‘Primary Sales’ transaction. Company invoices the product at distributor price, and revenue generated from this transaction is the net revenue of the company.
  • Secondary Sales – When a distributor invoices the product to a retailer, the transaction is called as ‘Secondary Sales’. In this transaction, distributor keeps its margin and invoices the product at dealer price (also called as retailer price).
  • Tertiary Sales – When a retailer sells the product to a customer (end consumer), the transaction is called as ‘Tertiary Sales’. The product at this level is sold at either of MRP (maximum retail price) or MOP (Market operating price).

Topics: Channel Management

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