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Channel Sales: an in-depth guide for partners

Channel Sales
So, you’re interested in potentially becoming a ‘channel partner’ for a vendor or parent organisation.

Whether you’re already familiar with what channel selling entails, and want to learn more about your options, or the term is a completely new addition to your vocabulary, we’ve created this resource to give you as comprehensive a guide as possible.

Most of the information out there is aimed at the vendors and parent companies themselves, to help them multiply their growth and exponentially raise their profit margins.

So we thought we’d take a different approach, and focus on supporting the needs of aspiring channel sellers themselves.

We’re going to start by explaining everything you need to know from the ground up.

So you have all the information you need to make an informed decision regarding your channel selling aspirations.

Just what exactly does ‘Channel Sales’ mean?

Leading technology consulting firm Gartner defines Channel Sales as…

“The indirect sales channel that a business-to-business (B2B) sales organisation uses to go to market.”

This definition certainly isn’t incorrect, but it doesn’t exactly make the whole dynamic easy to picture.

What does this actually mean in real terms? What does this look like?

Allow us to explain.

The key word to focus on in Gartner’s definition is indirect.

When we imagine a traditional sales dynamic – where a company sells a product that they make straight to an end customer – that’s direct sales.

The reason is, as the name implies, that there is no intermediary or middleman to speak of in this relationship.

The vendor and the customer are in direct contact with one another, and the vendor has complete ownership of the business relationship in question.

Channel sales on the other hand is indirect sales – which means there is an intermediary involved in completing the process.

That intermediary is the channel partner.

A channel partner: in basic terms

A channel partner is an organisation that is contractually enabled to market, sell, distribute, implement, or otherwise deal with the products or services of another company on its behalf.

So if direct sales involves Company A selling to a Customer, channel sales involves Company B selling Company A’s products or solutions to that Customer.

Company B may also manage the relationship with the customer, and oversee the sales process.

Channel sales can take many different forms. But we’ll dig into that shortly.

Still keen to learn more about being a channel partner? Have a look at this infographic

First, let’s contextualise how widespread channel selling is, current attitudes towards it, and how it is proving to be of benefit to more and more businesses.

Channel Sales: The State of Play

In today’s business landscape, channel sales represent a significant driver of revenue for many successful organisations.

According to Forrester, 75% of the world’s commerce consists of sales made via channel partnerships.

The world of channel sales is rich with opportunity. And that means organisations looking to sell, distribute or implement the products and services of other businesses can hope to reap significant benefits.

Recent findings from DemandGen’s 2022 Channel Partner Benchmark Survey suggest there is a bright future ahead for the world of channel sales, especially for the sellers themselves...

Execs are confident in the money-making ability of channel sales
DemandGen’s Benchmark Survey concluded that most B2B executives are confident in channel sales as a reliable route to market.

Despite the fact that many respondents in the survey claimed their own partner programs to be falling short in terms of efficacy, these same business leaders anticipate channel partners will bring in higher levels of revenue in the months and years to come.

As such, leaders and other influential voices in sales strategy are focusing more on their channel partners than before, and investing in them to help expand their sales efforts.

B2B leaders are increasing their channel partners
More than 80% of business leaders have stated they will increase the number of channel partners in their network – and over 25% of them will look to do so ‘significantly’.

Meanwhile, 66% of B2B leaders anticipate more than 11% gain in revenue will be attributable to channel partners.

Channel partners are receiving more investment…
Around 70% of those surveyed in the DemandGen report stated plans to increase their financial investments in channel partner support.

…and other resources too
More than 40% plan to upgrade solutions supporting the training and learning of the channel partners in their ecosystem.

Overall, the data appears to suggest that channel selling is in a healthy state.

Organisations looking to engage in reselling, marketing or distributing products and services can expect greater demand, greater investment, and greater access to resources designed to support sales enablement.

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