Whether it is cutting-edge start-ups or established IT giants, there is no shortage of vendors looking to launch into the channel.
The thousands of resellers which make up the UK channel are extremely popular, and vendors - many from the US or further afield - are keen to team up with them. But although new partner programmes and channel incentives are extremely common, not all vendors which are new to the channel get it right.
Below is a list of some of the most common ways vendors get it wrong when they launch into the channel and run their partner businesses.
Going too wide
With reseller partners acting as an extension of a vendor's sales force - often generating most, if not all of its sales - it might seem that "the more the merrier" would make sense when signing new ones up.
But recruiting too many, too soon, can be a rookie mistake, according to Gavin McLoughlin, founder of GEM Messaging, which helps vendors on their go-to-market strategies.
"They sign up too many partners and are therefore not rewarding the early adopters," he said.
Justine Cross, regional director of data security specialist Watchful Software agreed and said: "For me it's simple. I always start small. If you jump in with 50 partners, you're not going to be able to train them.
"When those partners go off somewhere else because they are not making any money, the vendors immediately blame the channel and say the channel is not loyal, when it's the vendor who is not doing a good enough job. There's not going to be enough business to go around. If you're a start-up vendor, every sale has to be sold - you don't get someone ringing up saying ‘hello I would like to buy 50 of these' on a daily basis. You have to make sure you and the channel partner are profitable. If you sign up too many all at once, it is never going to happen."
She said starting small is the best plan, adding new partners to address areas of the market in which they are experiencing high demand.
Many vendors look at the channel and view all partners as being the same, GEM Messaging's McLoughlin said, adding that this is another way to get off on the wrong foot in the channel.
Many companies may broadly fit into the "partner" category, but each have different business models and strategic objectives, which vendors must appreciate, he said.
"It's about asking [partners] what they need and what is the best way [for them to do business]," he said.
"Most channel partners are different. I've worked for a number of vendors where the tar them all with the same brush.
There's not something called ‘the channel', it is a number of different channels."
If there's one thing which is guaranteed to upset a channel partner, it is a vendor playing dirty tricks. GEM's McLoughlin, who has worked in the channel at various vendors in the past, said he has witnessed a number of instances where vendors in the wider industry have not played nicely in the channel.
"Channel switching is a problem," he said. "I don't want to name names but there are certain vendors which have got a habit of that. One reseller will bring them a deal and they will fulfil it through someone else. It is usually about greed.
"Let's say you've got a small reseller just starting out and they bring you one deal. Then you've got another reseller that's pretty large who you want to get activated. The way a lot of vendors work is if you bring them deals, they're more likely to bring you one, which we call a reciprocal deal. What will happen is - and I have seen it happen - a vendor will take a deal through one reseller and give it to one of the big boys as a way of carrying favour. That is more common than you think and I still see it happen with the aggressive vendors. I've always said it's a no-no. Once you do it once, you upset people."
"When those partners go off somewhere else because they are not making any money, the vendors immediately blame the channel and say the channel is not loyal, when it's the vendor who is not doing a good enough job"
On top of this, McLoughlin said it is not unheard of for a vendor to suddenly change its mind on how much margin it offers the channel. He said, as a result, margin protection should be an essential on any partner programme.
"At the end of the day, resellers are in it to make a healthy margin and quite often, vendors will progress the deal and then at the last minute they will just cut the margins," he said. "There has to be margin protection in it all along the side."
Often, when an established vendor turns its business to the channel, it will start off slowly, gradually moving the ratio of channel to direct business it does in favour of the former, which can bring about some obvious conflicts between the two sections.
"You either have a clean channel policy, or you don't"
But start-ups are not immune from conflict either. Although many start life in the channel selling everything through the channel, many will add the caveat that some very large deals will have to be taken direct.
Watchful's Cross said in her opinion, it is all or nothing when it comes to the channel, and if a vendor claims to be channel-centric, it should not take anything direct at all.
"I think it's disloyal - you either have a clean channel policy, or you don't," she said.
"At what point do you decide what that [limit] is and which customers they are? If you have an end-user sales guy who is only paid on something which doesn't go through the channel, they're going to be out looking for a new [direct] opportunity. It always causes conflict.
"I don't feel it is the best way - how can a reseller trust you? And how can you get the best out of a reseller if there is not 100 per cent confidence in the effort they are putting in to generate opportunities [for the channel]."
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