Channel Partner vs. Fulfillment Partner

Many companies have a direct and an indirect sales model, which will inevitably create some channel conflict. I am not suggesting that you have to choose one or the other, but rather that when you have both you will have to be aware of and mange channel conflict. This becomes a business issue…not a marketing issue or a channel issue. It is a fundamental and strategic position that you have to address as a company.

While at a technology company, our direct sales leader preferred to use the channel as a “fulfillment partner”. His view was that his team would get the deal and hand it off to the channel for fulfillment. In a perfect world, we would also provide the service. The fulfillment partner would get distributor pricing and whatever margin the deal was sold at. Hmmm.

The same direct sales leader suggested that the channel should be used for “unaided business” only. He described this as business that “just happens”. I, for one, have never seen business that “just happens”, but would love to find it. Unaided business is now one of my favorite oxymorons.

The reality is that the channel wants to have a thriving business, as well. You will be hard pressed to find a channel partner that will be willing to just fulfill an order for you. You will be equally hard pressed to find a channel that will accept responsibility for unaided business. Besides, if there was such a thing as unaided business, why wouldn’t the vendor do that direct and get the entire margin?

The BIG question that a company needs to answer is one of customer relationship ownership. Does the channel own the relationship or do you? Is there a way for both you and the channel to have a relationship with the customer? Sure there is, especially now. If you choose to have both a direct and indirect go-to-market model, you must set boundaries and procedures and follow them. Perhaps a Channel Bill of Rights as part of your channel program is required? Whatever your strategy, you must adhere to the fundamental principles of mutual commitment, mutual growth, mutual profitability, and brand.