What is Channel Sales?

What is Channel Sales


Channel Sales is a kind of strategy used to sell products/services. In general, there are two techniques: channel sales and direct sales. So, if you want a low-risk and reasonable sales strategy that can be altered easily as the organization expands, channel sales may be the best solution.

Initially, eliminating the intermediary appears to be a sensible decision. Direct selling entails you keeping the product’s entire profit; no one takes a cut of your sales. However, with more consideration, this is not the case.  When examined properly, hidden expenses like wages and overheads abound in direct sales.

Most businesses, employ channel sales at some time since it is a cost-effective way to investigate potential markets. It’s very useful if you want to concentrate on growth outside of your sales team.

Want to step up your sales game? Build a successful sales process and improve your business.

If it seems intriguing, continue reading to find out more about channel sales.

In this blog, you’ll be learning about:

  • Understanding Channel sales
  • What is a Channel Partner?
  • Benefits and drawbacks of channel sales
  • Steps to confirm that you are at the appropriate stage for channel sales

Understanding Channel Sales

Channel Sales technique involves delivering your product or service to the market through a third party. In other words, these are tied to sales partners who do not work for your organization directly. Consider the following example for channel sales. If you visit the Samsung website to purchase a Samsung Smart TV, you are engaging in direct sales. However, if you bought the same TV through Amazon or Flipkart, you would be purchasing the same product through one of their channel sales.

It may assist your organization growth in three ways:

  • To contact new clients who prefer to buy via consultants or resellers rather than straight from the provider.
  • To sell items through third-party marketplaces and managed service providers, which may give consumers package deals and appeal to purchasers searching for alternative product options and prices.
  • It might assist you in expanding your organization into new geographic areas.

What is a Channel Partner?

A channel partner is an organization that promotes and distributes a product made by another organization. Channel partners include resellers, affiliate partners, distributors, value-added providers, independent retailers, and anybody who does not work directly for your organization. They may aid teams in growing sales and customer loyalty. Your partner functions as an extension of your team. Depending on your organization’s players, strategy, and project objectives, this collaboration might be long-term, interim, or short-term.

Benefits and drawbacks of Channel Sales

The biggest reason why companies are afraid to use channel sales is a lack of understanding of how it works. But, perhaps, more importantly, the advantages and potential drawbacks are not fully known. To answer this, let’ take a look at a few of the most important benefits and drawbacks of channel sales, which should aid you to determine whether or not it’s something you should do for your organization.

Benefits of Channel Sales

The channel partner often has a well-established presence, is well-known and trusted by local customers, and already promotes their brand and the value it provides. On the strength of all of this, you may reach new clients at a low starting cost and cost-effectively penetrate new areas and markets. They may also assist you in establishing a presence in a new location with a relatively low initial price. You are not required to start and manage new enterprises, advertise locally, hire staff in distant areas.

A channel sales approach allows you to concentrate your efforts on what is most important: the quality of your product or service, product development, operations, personnel training programs, and so much more that you easily would not have time for if you sold directly without the assistance of others.

  f you have an established channel sales strategy with the appropriate revenue sharing, co-marketing, incentives, and other strategies, you can scale very efficiently by adding more channel partners into that mix, and also you can scale up and enter new markets or scale down as requirements change. This is an easy move for your third-party partner to do. One partner manager may handle many partnerships, bringing in income that would otherwise need an entire in-house sales team.

One of the most challenging additives of advertising and marketing a product is built-in trust. However, with channel sales, you could depend on the belief that your partner has already built.

As they have already set up the contacts of their marketplace, consequently your advice will sufficient for almost all of the potential clients. As a result, this method permits you to increase a brand presence with minimal effort. Also, it’s far a low-risk method to look at and take a look at a brand-new marketplace because of reduced prices and higher efficiency.

You can also additionally take a look at new items, bundles, promotions, and campaigns with your partner without the likelihood of risking yourself as risk as you will in case you attempted it in direct sales.

Drawbacks of Channel Sales

Selling through partners entails an intermediary between you and the consumer. Depending on the model, your organization may not be involved in the sales process at all, leaving you with little or no influence over the result of the sales possibilities. You no longer have direct contact with your clients to obtain marketable feedback.

If your partner is concerned about their customers, they may restrict you from contacting them directly. Even if you are allowed to contact them, obtaining their point of view may take significantly longer than traditional direct selling. You can also find up with a partner that isn’t very good at selling. If it were your salesperson, you could train your salesman and put them on a performance plan. But when it comes to a partner, though, you have none of that power.

Based on the types of partners and the value they bring, you should split between 20%-30% of your income with the partner who makes the sale. Also, implementing a change in method, product, communication, or any big adjustment is more challenging. Instead of altering just one team, you must persuade numerous teams to change.

Confirm that you are at the appropriate stage for channel sales

To implement your best sales channel strategy, you need to conduct intensive analysis and set it up accordingly. 

  • The first step is to ensure that you are in the proper sales channel stage. Consider whether the bandwidth you have available for sales channels is adequate. The goal is to get more customers to buy your product, so before you move ahead, ensure you don’t disrupt the current sales process.
  • Check with your partners to make sure that they’re a decent suitable your company. Before doing business with a potential sales partner, gather as much information as possible about them. In this case, you’ll need to create an ideal partner profile. The profile will include the qualities you actively sought in a sales partner.
  • Now that you’ve found partners, give them the authority to perform in a way that will help you sell more. Explain to a newly acquired third party the benefits of working with you. This motivation will drive them to work just as hard, if not harder, than the direct sales team to reach more customers.
  • Finally, for the smooth operation of the business, hire a channel sales manager who will be in charge of managing partner relations. Every partner will receive the attention they require to carry out their responsibilities effectively. The channel sales manager you hire will monitor performance and provide relevant resources.


While channel sales may require a significant initial investment of your time and energy, it has the potential to take your company to a whole new level. You’ll simply broaden your market in ways that direct sales make difficult by investing the trust that partners have built with their customers. It gives you flexibility based on your size and goals, and it allows you to experiment with less risk.

You can use the best sales tools available to have the best of both worlds!

It’s all about getting all aspects to work in harmony, this will definitely be beneficial for your business.

Have a good day!