Sales Enablement

Beyond Affiliates: Why Building Channel Sales Is Key To Selling Software

As a business owner, I can’t tell you how often I get approached with the opportunity to make an extra buck or two on affiliate revenue.  If I will just use my clout to hock their wares, they’ll pay me money.  And, after all, as long as someone pays me money I’m motivated to do it… right?  Wrong.

If you’re hell-bent on building an affiliate-based sales model, save yourself some time and go to where the affiliates are.  Clickbank, Commission Junction, or the like.  And, I’m not knocking that model.  It works.  It’s profitable.  And there are individuals who are skilled and interested in that sort of opportunity.  It just so happens that they aren’t always one and the same with successful business owners with profit-generating companies of their own.

For various reasons, often having to do with brand image, affiliate sales might not be what you’re looking for after all.  While it can get results, it can come with a reputation.  If you don’t want to see your product hocked on hundreds of different squeeze pages with hyped long copy, pushed out in Twitter streams chock full of affiliate links, or spam to millions of people — all with your name on it — then you might consider a different approach.

The challenge, then, is how do you get “reputable” businesses (and I use that term hesitantly, as I don’t mean to imply that affiliates are categorically of ill-repute) to represent your product in a more conservative business fashion?  The answer: find what motivates them.

As Douglas Karr pointed out in a recent post, citing one of my favorite viral videos, money isn’t always the answer.  In fact, it rarely is.  In fact, it’s the very offer of money, and nothing more, that actually dissuades me from considering affiliate offers.  In effect, it insults my own worth, my sense of who I am, and what I do, by presuming I could be distracted from my already all-consuming business ventures with the simple allure of money.

What Are Channel Sales?

Channel sales refer to the practice of selling a company’s products or services through third-party intermediaries, such as distributors, wholesalers, retailers, and value-added resellers (VARs). The goal of channel sales is to expand a company’s reach and access new markets by leveraging the resources and relationships of these intermediaries.

Channel sales enable a company to benefit from the expertise, market knowledge, and established relationships of these intermediaries, who can provide valuable insights into local market conditions, customer preferences, and competitor activities. This can help companies to tailor their products and services to better meet the needs of their target customers, increase their market share, and boost their revenue.

The success of channel sales depends on the quality of the relationships between the company and its intermediaries, as well as the effectiveness of the marketing and sales strategies used to promote the products or services. It requires careful planning, ongoing communication, and a commitment to building long-term partnerships based on mutual trust and value.

What Are The Benefits of Channel Sales?

While affiliate marketing and channel sales share some similarities, there are several benefits that channel sales can offer over affiliate marketing:

  1. Deeper relationships: Channel sales involve building long-term relationships with intermediaries who are invested in promoting your products or services, whereas affiliate marketing typically involves a more transactional relationship with individual publishers or affiliates who may promote a wide range of products or services.
  2. Greater control: Channel sales allow you to exercise more control over the sales process, pricing, and customer experience since you are working directly with intermediaries who have a vested interest in your success. With affiliate marketing, you have less control over how your products or services are promoted and presented.
  3. More flexibility: Channel sales allow you to customize your sales strategy and go-to-market approach based on the needs of different markets, customer segments, or product lines. With affiliate marketing, you are limited to the terms and conditions of the affiliate program and the capabilities of individual affiliates.
  4. Access to expertise: Channel sales can provide you with access to specialized expertise, such as local market knowledge or technical expertise, that you may not have in-house. Affiliate marketing typically does not provide this kind of expertise.
  5. Higher margins: Channel sales can enable you to achieve higher margins on your products or services since you are working with intermediaries who are incentivized to promote and sell your products or services at a premium. Affiliate marketing typically involves paying commissions to affiliates, which can reduce your margins.

How To Build Channel Sales

So, how do you build what I call Channel Sales – an indirect distribution model that’s more complex (yes, more sophisticated) than affiliate?  How can you know what will actually motivate a business owner you wish to partner with? 

Simple: It’s their business.

Entrepreneurs toil endlessly to grow their companies. They have dreams in mind — some monetary, some altruistic, and some just plain fun and rewarding.  If you want to tap into that passion and use it for your sales growth, you have to align the two.  Figure out how joining your channel will not only add a few bucks of commission to their bottom line but will actually help them drive their business to what they most desire.

You can see this principle employed in many of the successful channel sales models today.  Ad agency, for example, is a model where publishers seek to fill insertions, but they recognize the agency’s passion is for the creative solution.  Savvy publishers find ways to augment that goal.  My first job was selling software for a local Autodesk VAR.  I was baffled as to why Autodesk charged double the standard rate for services until I realized that they wanted to encourage customers by whatever means possible to engage the local VAR for services. 

Building a sales channel isn’t easy, and it is very rarely a fast process.  If you want fast and easy, get the affiliates on your side.  If you have more on your mind than money, then recognize that so do we.

Nick Carter

Nick Carter is truly an entrepreneur at heart. He's passionate about entrepreneurship in general. Nick started and ran 5 businesses in his career. His primary goal is to keep himself entertained with a variety of exciting business opportunities and new adventures.

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