Companies are always looking for new sales channels for their products or services. Almost every industry relies on some type of channel to deliver or sell the product.
Insurance has agents to sell the policies. Car manufacturers have dealerships. Food makers have supermarkets. The IT industry also has a channel - agents, distributors and resellers.
What are the key advantages to a channel?
Low Cost - The cost of hiring and maintaining a direct sales force is prohibitive for most start-ups and mid size companies. Using a channel means they only make money when you make money. They typically take an upfront margin on the product or service sale, again leaving you with minimal cost.
Market Penetration - The channel should be used to get into the market faster and get to more clients than you could possibly do through your sales force. With more "feet on the street", your company will gain more branding opportunities and potential clients.
So, what does a channel want from a vendor?
The obvious answer is the product or service, but what else do you need to supply?
Training - Just as you would educate the internal sales staff, you will need to train the channel on your product, the market and your differentiators from the competition.
Margin - Obviously, we are all in business to make money and the channel is no exception. How much money can the channel make on selling your product or service?
Support - If your product requires support from the vendor, the partner will need some way of receiving this support as well. You probably want to set up a unique number for the channel. This allows them to receive priority as well.
Leads - Today, the channel wants to see that the vendor is supplying something other than just the product or service. Can you provide leads to the channel that they then will close into sales?
Remember that a good channel program requires constant retooling. A profitable program will take up to 8 quarters to create and build.
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