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The Growth of Channel Sales

What is the biggest challenge to scaling revenue these days? Maybe it’s the selling hours…

Despite hiring the most focused people, having top-notch investment in tools, and removing all possible distractions, selling hours are limited. Hiring more sales reps is not the only solution, there’s something B2B teams can do to improve this: it is to introduce a channel sales model.

In a channel sales model, you do not hire more reps, but you distribute your products through a channel partner that will market/sell the products for you.

Through channel sales, a company sells through third-party partners such as affiliate partners, resellers, or value-added providers who do not work for you or your brand directly and sometimes not even exclusively.

Approximately 63.5 percent of companies have reported an annual increase in revenue from their channel partners, so, channel sales can provide good results.

Most of us are familiar with channel sales as they account for 75 percent of the world’s sales and consumer market. Channel sales is a simple strategy where the parent company sells its products through another company. The other company is known as an  affiliate, partner, or distributor depending on the business relationship.

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Channel sales are also known as indirect sales. Here are the types of channel partners that you must know.

  • Resellers: They purchase products from the parent company and sell at a different price point. For example Walmart and Macy’s.
  • Affiliate Partners: Affiliate marketing partners are those who promote the product or service of their parent company and earn a commission. Example: Influencer Promotions.
  • Distributors: They serve as a middleman between the parent company and the customer. They are entitled to receive a percentage of sales. Example: Rexel USA.
  • Independent Retailers: It is an independent business not tied with any parent company.
  • Dealers: These are retailers dealing with a specific line or product. For example, an Audi Car Dealer.
  • Agents: These are individuals overseeing negotiations between sellers and buyers in exchange for a percentage. Example: Real Estate brokers.
  • Consultants: Consultants offer their services. They manage the creation and productivity of various sales channels but are paid by the parent company. Example: The Boston Consulting Group.

Why you must use channel sales?

While channel sales may not be for every company, it does have significant advantages over direct sales and ROI. The biggest advantage is affordable distribution.

When a business partners with different sales channel partners whether small, medium, or large enterprises, it can grow its business without the expenses of hiring and onboarding an in-house sales team.

Moreover, channel sales create trust through product endorsement, increase revenue growth efficiency and offer customers access to product bonuses.

Building A Channel Sales Program

Starting a new channel sales program takes time and precise structuring. You should create a strategy and work keeping in mind all the nooks and crannies of a channel sales program. It all starts with finding the right partner and, once you find a partner, the process starts.

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Tips To Boost Channel Sales Practices

1. Define the structure of your channel sales

Three primary structures for your channel sales are:

  • Selling through a channel partner: such as a fitness store dealing with sportswear of different brands can sell your sportswear too.
  • Sell with a channel partner: such as a collaboration with a web designer and content writer.
  • Channel partner selling: such as a white-collar agency labels your software and adds additional services.

2. Create a compelling offer

The success of your channel sales program will boil down to the offer you make to your partners and clients. Honestly, without an appealing offer, sales are limited, or it becomes difficult.

3. Provide channel sales enablement

Directing your efforts with the help of channel sales enablement will boost your performance and your partners’ as well. With the right tools, partners can effectively share your brand story and connect with the right audience.

4. Run a channel partner incentives program

Your channel sales program will need motivation all the time. You should not only make the best offer but you should also add incentives to supercharge your channel sales efforts.

5. Set realistic sales expectations

To achieve your goals, you need to have an aim first. Concise and definite sales expectations are essential for your channel sales success.

6. Use a channel partnership management platform

Your efforts to boost your channel sales program will be successful with the right channel partnership management platform. These platforms help you organize your partners’ data and performance. The insights will not only help you optimize your efforts for the future but also bring in success.

Final Word

Before starting a channel sales program, brands must find the right partners for their channel sales.

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