It is difficult to render a sweeping verdict on whether an indirect sales model is better or more beneficial or direct sales to end-users are optimal. Both models have been successful. A company like HP (Hewlett Packard) prospered selling through an indirect channel. A competing company, in the same industry, Dell prospered selling its hardware directly to end-users. However, Dell is a good example to cite given how it has since turned over a quarter of its sales to the ‘channel.’
Each model is valid and appropriate under different circumstances including product type, line maturity and revenue size. The channel model, however, is typically applicable for companies without dedicated resources or wishing to scale beyond certain revenue ceilings. Channel partners bring connections and a strength in numbers, but need maintenance and attention.
Pay attention to activities under each heading:
1- Recruit partners which address product needs technically and coverage needs geographically.
2- Retain them by maintaining mindshare, providing education, support and offering profitable resell margins.
3- Optimize co-selling possibilities. Stock the partner area or portal of your website with marketing collateral, FAQs, selling scenarios and deal registration space. Provide leads, while ramping up partner lead generation capability and independence.
4- Hold partners responsible for utilization, registration and monitor lead flows bi-directionally.
5- Maintain open communications and learn simultaneous to teaching. Hold each other accountable.
Continuous feedback and collaboration is essential. Do not be afraid to cut ties once the relationship is stale and unprofitable.
This is the ultimate measurement of whether the channel is beneficial or perfunctory.