What is channel sales?

What is channel sales? It’s a big question, but basically it means that you use indirect channels to get your product to market. Here, we’ve gathered everything you need to know about channel sales.

In B2B, companies use all kinds of strategies to widen their reach, enhance their sales and connect with potential customers. Among these strategies, channel sales stands out as a cost-efficient way to reach a greater market. But what exactly does channel sales mean?

What is channel sales?

Well, at its core, channel sales is a sales strategy where you sell your products or services, not directly to the end customer, but through a third party. This third party can wear a bunch of different hats – sometimes it’s a partner, other times a distributor, an affiliate etc. Whatever the specific channel type, the idea is to use the strengths, networks and capability of an already established company to get your product out.

Channel sales vs partner sales

Partner sales is oftentimes used synonymously with channel sales. In other words, both refer to an indirect sales model that B2B companies use to go to market – and where a third party acts as a middle-person between them and their end customer.

Channel sales vs indirect sales

In the same way, channel sales is often called indirect sales. Simply put, companies that use channel sales get their product to market through sales channels that place another company between them and their end customer. It might be the easiest way to understand channel sales: you don’t sell directly to your customers, but reach your customers through strategic channels.

Direct sales vs. indirect sales

To understand indirect channel sales even better, it’s helpful to dig a little deeper into its counterpart – direct sales. There, the distance between a product’s maker/vendor and the customer is minimal. You can think of this type of sales like a quaint mom-and-pop bakery where the baked goods are crafted on-site and sold directly to people who come into the store. I.e. the maker of the goods create (well, bake, in this case) the product, present and sell it directly to the customer with no intermediates.

Contrast this with the world of channel sales. Here, the vendor typically outsources the actual selling to others. Why? Well, the reason is oftentimes spelled a broader distribution. I.e. for vendors who want to tap into markets that are vast, diverse, or geographically distant, it becomes a hassle to handle everything in-house. This is where channel partners, with their established networks and expertise, come into play. They act as bridges between the vendor and the customer, ensuring the product reaches a wider audience.

Why choose channel sales?

The allure of channel sales isn’t just in its potential for an awesome distribution. Companies also consider it a way to:

Get into new markets at a relatively low cost
Lean on the expertise of local partners who are already familiar with their markets
Minimize risk through joint ventures with partners
Focus on what they do best (such as actually making the product) while handing sales over to people who’re experts in the field

What are the challenges?

Despite the great opportunities that come with channel sales, there are some challenges that companies need to overcome to be successful at it. Here, we find things like managing partner relations, ensuring a consistent message, educating partners, making sure that they always have access to the right material and presentations and that there is a robust version control in place to keep material accurate and compliant.

What is partner enablement?

In its most simple form, partner enablement means that you give your channel partners the resources to sell your product. Something that, for example, can mean that you give them product training, access to marketing material, real-time updates, tech support etc.

On a deeper level, partner enablement is also about keeping your channel partner motivated and engaged. It is about collaborating and building a strong partnership defined by trust, transparency and mutual benefit. Which, in turn, can enable channel partners even further.

Partner enablement tools often give you the chance to share the right material with your channel partners, continuously communicate and engage them with updates, new material and a nice experience.

How can SP_CE help you drive channel sales?

SP_CE gives you a chance to keep all product material, sales presentations and marketing collateral in one central, digital room. Channel partners can easily get access to the material they need when they need it, and a robust version control ensures that the right material always goes out to the end customer.

We call this partner enablement. In practice, it gives your partners one digital room to share with customers – and one digital room for all communication and collaboration with you. That way, you can both enable and engage your partners throughout your journey together. Which, in turn, oftentimes translates to stronger partner relations, a higher mindshare and stronger sales results. You can read more about the SP_CE Partner Enablement here.

Where can I learn more about channel sales?

Here. Below, you can find articles that will help you understand and make the most of of your channel-sales strategy. They’re divided in the areas Channel Sales and Partner Enablement to make it easier for you to sort through.