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The 8 Dangers of Channel Sales

Yielding the capability of third-party channel sales can prepare the way for highly affluent business models, granting your company with valuable leverage, supplementary sales resources, and the chance to capitalize on current consumer and customer relationships that channel partners bring towards the table.

When planning for a flourishing company manufactured around a channel sales model, it is important to take responsibility of the following key points:

  1. Navigating Time Challenges:
    Third-Party Channel sales mostly need a considerable proportion of time to gain momentum. The complexity surfaces from the fact that resellers administer different sets of accountabilities and priorities as compared to your company. While your business releases a startup urgency and manages an exclusive target on your goods and services, channel partners are mostly immersed in several deals necessary for their own financial sustainability. Persuading them of the return on investment in your company’s goods and products requires a meticulous and convincing effort.
  1. Mindful Transition for Sales Teams:
    Conversion of sales team members adapted towards direct sales to encourage third-party channel sales necessitating an understanding of the significant mindset included in accomplishing the long-term and immensely rooted effort of creating a channel. Sales team members adapted to direct sales mostly choosing more control over their products and services, appreciating the immediacy of outcomes from direct consumer communications. On the other hand, channel sales teams consider that patience can harness greater leverage over time.

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  1. Your company must recognize that your company shall need to figure out the sales model strategy yourselves before your company is ready to start to teach channel partners how to duplicate that model plan. 

    In other words, your company shall need to make your first sales deals directly using your own direct sales strategy and efforts (possibly by taking help from a channel partner). 

    This shall help your company understand if your goods and services/market fit are right, who your company needs to involve in the sales process if the messaging is resonating, etc.
Channel Sales Management
  1. If your company is deciding to use a third-party channel sales model, be ready to commit to it entirely, and not take hold of orders directly (unless there are some very clear rules and regulations). 

    If the channel sees your company competing against them, it shall turn them off, and minimize their commitment to your goods and services.  It shall also lead to disputes in your own sales department which shall want the short-term gain of greater commission from taking sales deals directly. 

    While this might mean more profit margin for your company in the very short term, it is not going to help your company to  build the leverage of the channel, where once they have seen how to make money from one sales deal, they shall replicate that with other consumer and clients of theirs. 

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  1. Resellers are in need of education on how to sell handle objections, differentiate your company’s goods and services from the competition, etc. 

    This requires tremendous work by your third-party channel sales department. But they shall  need backup from channel marketing executives and people whose job it shall be to create the appropriate training materials, tests, programs, etc.
  1. Examine and inspect to make sure that there is a channel that sells similar goods and services to a similar purchaser. For instance, there is now a nice ready-made path and channel that sells VMWare products to IT, and that channel may be used to sell a diverse variety of add-on goods and services. 

    However, if there is no such channel in place, your company shall have a significant uphill slog to create a channel that is suitable for your company’s own needs. Few startups have the funding or time needed to pull this off. 

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  1. Distributors, resellers, vendors, retailers, etc often are lazy and do not want to do the work to create and generate demand for new goods and services. 

    They usually prefer to sell goods and services where the demand already exists This means your company must still be expected to create and generate demand using your own marketing efforts.

    Ideally, your company should be in a position to feed them sales leads, or better still, sales deals that are close to being done in the early days.
Channel Management Process
  1. Distributors, resellers, vendors, retailers, etc are notoriously bad in the marketing field. So besides your own demand attempt marketing efforts, your company are likely to want your channel marketing executives and staff to create programs and materials that may be used by the third-party channel to market to their own consumer and clients. 

    They shall then need to push the distributors, resellers, vendors, retailers, etc into committing to running webinars,  events, etc. using those materials.
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Given the right channel sales strategy, the right people, the best goods and services and market fit, and having a lot of patience, the channel sales model strategy may be one of the most profitable business models for your company.