Learn about channels
Basics
What is a sales channel?
A sales channel provides a way for a business to sell their products and services. It’s a term common with business-to-business (B2B) companies, even if those companies ultimately sell to an end consumer. To deliver value to the customer, a business may choose a single direct channel, multiple indirect channels, or a combination.
What is an indirect channel?
An indirect channel consists of independent intermediaries who sell and deliver goods and services to your customers on your behalf. Those entities can be partners of various types, ranging from distributors, wholesalers, resellers, or marketplaces (to name a few).
What are the advantages?
Selling and delivering to customers directly gives a business control of pricing, delivery, and risk. At some point, to scale, a company needs to partner to expand its footprint. That can mean a larger sales footprint, incremental delivery services, or differentiated customer benefits.
What are the challenges?
The key word is “independent”. That means that these are entities that are not necessarily owned by your company. This reduces your control and adds complexity to each step in your value chain. When your partner companies have choices (and they do), you have to constantly position your company and solutions to gain their mindshare and priority.
Current trends
The channel is no longer only linear. Partners play various roles in the development, sale, and delivery of a solution. The number of points of influence are exponentially more now, and they to be well understood to be successful.
As a service is taking over. Customers are buying managed services and outcomes, vs. strictly a product. Regardless of the industry, businesses and consumers are choosing to pay as they go vs. purchasing with an upfront payment. The subscription economy is diversifying choice by changing what customers buy, from whom they buy, and how they pay.
Digital continues to grow in importance. Regardless of what you are offering to customers, digital touchpoints can accelerate time to value. This may be in the ordering process, delivery tracking or general customer experience. Customers are not the only ones that benefit from digital; effectively integrating digital touchpoints in the partner experience is also critical.