When it comes to running a business, there is only so much work sales representatives can do to generate more revenue. Especially since hiring and training an in-house sales team is an expensive, tedious, and time-consuming job, you need a solution that takes the workload off your hands and boosts efficiency.

Have you considered involving a middleman to help distribute your products and services? The terminology for this is called Channel Sales or indirect sales.

It allows businesses to penetrate potential markets by outsourcing and generate leads. Let’s take a deeper look into what Channel Sales is all about.

Definition πŸ“

Many emerging companies take the aid of a retailer in offering their products and services to the target audience. This indirect technique of supplying your services is called Channel Sales, aka Outsourcing.

The third-party performs a share of the tasks that were handled inside the original company. Businesses often take this approach to loosen the strain on their financial resources and elevate business productivity.

What Is a Channel Partner? 🀝

A channel partner is an organization that collaborates with the producer of a company to advertise and promote their commodities. Channel partners can assist team players in attaining better retailing and loyalty. This partner works as a member of your community.

Channel partners consist of three major parts:

  • Independent dealers
  • Suppliers
  • Sales agents

The duration of your relationship with them depends on your group’s requirements, plans, and duration of your project.

Factors to Consider When Implementing a Channel Sales Model 🧐

If you intend to yield the best possible results, it is necessary to make a checklist of the primary factors required to use this sales model and whether they align with your business goals.

Product Maturity πŸ§€

To see whether you’re fit to use this method depends on where your product stands on its life cycle stage. If your merchandise is fresh and you want to learn whether the product satisfies customers, then direct sales are the correct choice.

You need to place a pause on channel sales until your product has matured from its shortcomings. Finally, when you see a steady increase in the number of buyers, then you can adopt the path of channel marketing.

Business Scope and Maturity πŸ’πŸ»β€β™€οΈ

Small scale corporations that have just started don’t have to invest in recruiting a sales team. By leveraging the help of channel partners, entrepreneurs can focus solely on growing their business and producing sales.

Once your campaign has gained a steady sales flow and you’ve grown your market reach, you can consider setting up an in-house sales team. Otherwise, if your collaborations are offering you demanding results, then keep on with this type of sales management.

Sales Procedure πŸ‘¨πŸΎβ€πŸ’»

If you want your channel sales strategy to go smoothly, you need to make sure your sales process is well-researched and thorough so that it’s easier for partners to resell your products effectively.

Highlight the interests of buyer personas, buying triggers, pain points, and any other insights that are crucial in helping your channel partners to market your products.

If your company specializes in electrical equipment such as coaxial cables, connectors, switches, etc. you need to clearly explain the selling cycle of these products to the channel sales team to avoid inconsistencies.

Revenue Demands and Expectations πŸ‘€

Setting up a channel sale is a good solution for long term investment. So, if you’re looking for an instant revenue hack, then this is not for you. Since you’re cooperating with third party companies, the profitability of the cycle will not be under your control. Thus, it takes patience and diligence to overcome obstacles to achieve your business goals.

The Advantages of Channel Sales Model 🌟

Lower sales and Marketing Cost

Managing the expenses of sales teams in small businesses can become costly. You would have to pay for their salaries, supplying proper facilities, etc. However, if there is an industry that has similar targets as yours, you can cooperate with them.

Channel sales enable you to reap advantages from the price and effort your coworker has put into establishing a business and a renowned group of clients. Therefore, you can easily get exposure for your campaign to a new marketplace.

High-Efficiency Level ⏱

In this mode of sales management, a single sales manager can supervise and delegate work to several assistants to sell your product. In doing so, businesses can save their financial resources and cut down the costs of employing a new sales team.

Startups and small-scale companies that are on a tight budget don’t have to hire multiple salespeople; instead, a single channel manager can handle all their duties.

Rapid Testing πŸ‘¨πŸ½β€πŸ”¬

Channel sales allow businesses to infiltrate new markets and audiences to test out how these prospects respond to their products and services. In the case of launching new product lines, companies can experiment with enhanced marketing campaigns and better packaging to gauge the reactions of their customer base.

Built-In Trust πŸ‘πŸΌ

An added plus of the channel sales model is that when you partner with a renowned and admired company, you don’t have to work too hard on your brand’s presence and image. People are more likely to trust you when your name is attached to a credible source.

The Drawbacks Of Channel Sales πŸ˜•

Before applying any technique to your business model, it’s important to consider the pros and cons. Even the most trivial negatives should be understood to prevent any future inconveniences or mishaps that could disrupt the flow of your business. Knowing the disadvantages helps companies to use them to their benefit.

Lack of Control 😀

You only have little to no control over the retailing process. Therefore, leaving you at the mercy of your colleagues, whether they act upon your conditions or not. You cannot guide the sales team whether their performance is poor or impressive, as they are not under your command.

The risk of joining forces with a cooperator who has little experience in retail can bring a negative impact on your sales cycle.

Brand Risk 😳

Partnering with brands that have a bad reputation or a history of unsatisfactory service will negatively influence your image in the eyes of your customers. This leads to people refraining from using your products and the decline in sales.

Challenging To Operate πŸ˜–

Changing promotional techniques, product packaging, sales procedures, or any other business operation is challenging in the channel sales system. It’s also difficult to pass down information and monitor teams to check whether or not they are following the requested changes.

Channel Sales Partnership Models πŸ’πŸ»β€β™€οΈ

When discussing channel sales partnership, there are three chief approaches that companies consider, i.e. selling with your partner, selling through your partner, partner selling for you. Some companies tend to follow a mixture of the three, while others follow a single strategy. Here’s how each model works:

Selling With Your Partner πŸ‘₯

Ideally, this is the model most businesses favor more as it adds extra value to their services.

When you and your partner sell together, you elevate the customer experience by suggesting complimentary services and cross-promoting products. This kind of partnership helps companies to increase customer loyalty and sales.

Selling Through Your Partner πŸ’²

In this strategy, the standard example would be supermarkets and departmental stores that sell a variety of products and services similar to yours.

Department stores generally have a generous variety, which helps attract a good flow of customers. They display stock from different vendors that sell similar products, and prospects normally explore their options before they select the best fit for their requirements.

Partner Selling For You 🀝

Basically, these partners integrate your product into their brand label.

There’s a higher likelihood that the end-user may never even know about your brand as they’re being sold under the partner’s label.

Now that we’ve outlined the strategies of channel sales partnerships, it’s time to look into finding an ideal partner. It’s crucial to choose a channel sales partner that aligns itself with your business objectives and delivers maximum performance. Here is a list of components that you must take into consideration when selecting a partner.

6 Elements Of An Ideal Channel Sales Partner πŸ™ŒπŸ½

1.Complementary solution

Ultimately, the partner you’re collaborating with should add value to your product, or your product should make their services more esteemed. Once you know exactly where the customers require more help, you can direct the right services their way to enhance their experience with your brand.

2. Market

When looking at potential partners, one major factor to consider is their target audience. It would be unfortunate to discover later that your product isn’t the right fit for their customers.

It'd help to make a comparison of your target market to find out if your products can benefit their customers; this will help you identify where your product fits into their sales point. Pay attention to the demographics and geological factors that are crucial in deciding whether or not the channel sales partner is right for you.

3.Marketing Knowledge

If your partner is incredibly proficient in marketing, then you may not need to work on them at all. However, if their marketing knowledge is deficient, then you’ll need to spend some time and resources to train them. Some partners take this as a learning opportunity and eagerly look for businesses that offer an extra incentive to improve their skillset.

4.Technical Capability

Is your business largely technical-centered? If so, then you’d need a partner that has similar technical expertise, if not more. Analyze the amount of technical knowledge one requires to sell and market your products, then discuss this with your channel sales partner on their competency.

5.Sales Process

It’s important for you to look into your partner company’s sales cycle to examine how compatible you are. You can’t work with someone that has no room for your product in their sales strategy. This could also cause clashes and conflicts in the future, which would result in a decline in sales. Essentially, your partner should have a place in their sales process to upsell and market your products effectively.

6.Commitment Level

Before you choose a partner, ask yourself the level of commitment required for your campaign to succeed. Do you need your partner to come to work for a full day to get special training on the sales cycle? Or perhaps a short demo or a virtual meeting is enough for them to understand the inner workings of the job.

7.Your Potential Value

No reputable company will consider partnering with you if they don’t find anything that benefits them in return. When looking for potential partners, it’s better to look for options that are in a similar niche as yours. This way, you can identify ways to help the company either by upgrading their products, targeting a wider audience, or selling additional services.

Businesses can rank these components based on their partner requirements and their significance in the sales cycle. This will give you a clear picture of the kind of partner your business needs to reach wider audiences and work towards growth.

In order for the channel sales strategy to work, companies should focus their efforts on supervising the workflow. They can create training materials and resources, which makes it easier for the third-party to sell, troubleshoot, and represent their products in a sophisticated manner.

Don’t overwhelm your partners, but emphasize the areas that are significant, so they know what should be their focus.

Once they know what they’re working towards, it becomes easier for you to gauge performance metrics and find out what’s working and what’s not. Be sure to stay on the same page to avoid potential conflicts by scheduling regular meetings to discuss progress.

Businesses that are considering channel sales have the opportunity to expand their market reach in a way that wasn’t possible with direct sales.

It’s essentially an effective approach to long-term investment and establishing a position in the international market. If you’re looking for extensive business growth and efficiency levels, then this is the sales strategy for your corporation.

This article was written by Arslan Hassan. Arslan is an electrical engineer with a passion for writing, designing, and anything tech-related. His educational background in the technical field has given him the edge to write on many topics. He occasionally writes blog articles for Dynamologic Solutions.

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