Institutional (B2B) Sales

Overview

Institutional sales involve enterprises selling their products to organizations or companies who work directly with the poor. These community-based institutions use energy products/services in ways which benefit poor populations.This model can be used to improve the quality of services. For example, WE CARE SOLAR provides solar power to NGOs delivering health care. This model can also be used to increase the capacity of other supply-chain actors. For instance, Promethean Power Systems sells milk chillers to large dairy processors, who use them at rural collection facilities to increase the quality and value of milk from small farmers.

 

Pros

This model means that an enterprise does not need to focus on the low-income customer’s ability to pay for the product. Rather, the focus is on whether or not the customer can pay for the service although many cases do not require even this.  Furthermore, If a product is successful, it will posses strong scaling potential through existing service providers’ networks. This model takes advantage of the fact that NGOs and other institutions have more money than customers. For example, VillageTech Solutions’ Nepali implementer, VillageSolutions, sells most of its solar panels to NGOs using them in projects, which is better than selling them to individual customers because purchases are larger in volume.

 

Cons

This model only works with certain products. Also, it can be difficult to identify institutions who are providing services as good candidates and even more difficult to get them to change their practices. Finally, by not dealing directly with their end use customers, the enterprises may fail to understand the how they could better their product in order to reach as many people as possible.

 

Case Study

has invented a rapid-cooling milk chiller which is helping Indian dairy farmers keep their produce from spoiling when the electricity goes out at the centers where their milk is collected.

Because the chiller’s $4,000 price is too high for any of the farmers to afford individually, Promethean targeted other links in the supply chain who might be willing to pay. The chiller provides a service to farmers as well as the large dairy processing company that now only has to make one milk collection trip per day, rather than two. Eliminating this extra cost along with the higher selling price of the milk itself means that the chiller is certainly worth the purchase price and essentially pays itself off. These higher prices are also passed on to the farmers which benefits them as well.