What is Channel Sales?

    Peter Ganza, director of marketing at Magentrix, recently sat down with our resident channel coach, Paul Bird, to answer some of the most common questions individuals have been asking online. 

    What is channel sales?


    Paul Bird: “It’s not a sale on channels. 🙃 The relationship of a product that is being sold to somebody by someone other than the person that made it or is offering the product or service. Again, this is like when you buy your insurance from an insurance broker or insurance agent - they buy it from the insurance company or are working on behalf of the company. Same thing with real estate, you work with a real estate agent - that’s where you make your purchase but the actual seller is the person who owns the house. 

    In our industry, in technology, channel sales is any indirect relationship between the manufacturer of the software or hardware platform and the eventual end user. This can come through a distribution channel, a direct sales channel, or an indirect channel where you are working through a value-added reseller, an agent or maybe an independent software vendor (ISV) or system integrator (SI).”

    Peter: Did you know 75% of world trade flows through indirect channels?

    Paul: I’m not surprised. If you think about every retailer, retailers don’t make products, they buy them from the distributors, again another indirect channel sale that we use every day. 

    Jay McBain, Principal Analyst - Channels, Partnerships & Alliances at Forrester writes and speaks often on the trends and impact of indirect sales worldwide. He often uses the World Trade Organization (WTO) as a benchmark. The WTO has said ¾ of all world trade flows through indirect sales (channel sales). 

    Think about that for a minute. Three quarters of the products we interact with on a daily basis are not actually sold directly to us. The supply chain of resellers, distributors, agents, brokers, dealers is enormous and not only continuing to grow and expand but evolve. The partner relationship management (PRM) space is well on its way to transformational change as this new age of everything-in-an-instant is driving providers to meet these new and unique challenges. 

    Do you have anything to add to this topic? What does your definition of channel sales look like? If you have any questions we can answer, feel free to contact us.

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