November 21, 2022

What are Channel Partners & How to Profit From Them in 2023

Generate revenue for your business in 2023 with channel partners. Read more to learn what they are!


Channel partnerships are a great way to break into prime markets and verticals. Without channel partnerships, you might find it quite difficult to see significant growth on your own.

To scale your business and increase profit, you need to increase sales. And to achieve this, you need to engage customers. The more the customers engage with your product, the more frequently they convert. The right channel partners can help capture customers on their end to make this happen seamlessly.

So, what are channel partnerships, and how can you make the most of them in 2023? Read on to find out more.

What are Channel Partners?

A channel partner is a company that works with a manufacturer, vendor, or producer to market and sell the manufacturer's goods or services. Instead of using an internal team to market and sell its products, the manufacturer uses third parties under the channel partner agreement model.

Let's say your company offers cloud computing services. You may decide to market them directly to customers. Alternatively, you could use the channel partner strategy and work with a network of partners to market and sell your product.

what are channel partners

Types of Channel Partnerships

Channel partners can position you for steady, long-term profitability, while you focus on other aspects of the business. They can be the result of a preexisting relationship or something you seek out in a particular industry.

The benefit of working with a channel partner is that they can connect you with high-caliber contacts and teach you how to spot potential candidates who would make good clients.

Let's take a closer look at the most comment types of channel partners:

Affiliate Channel Partnerships

These channel partners are responsible for affiliate marketing or promoting products. Affiliate partners are paid when a sale is completed due to their marketing efforts.

In this type of channel partnership, the vendor maintains ownership and ongoing management of customers.

The key benefit of affiliate partnerships is their capacity to have a very broad reach, provide a large number of leads for you, and sell your product to customers you could not otherwise have reached.

However, because the vendor may not have a personal relationship with the potential client, these leads are frequently of poorer quality than those from referral partners.

Referral Channel Partnerships

Referral partnerships are companies or people who refer leads to a vendor with the goal of boosting customer relationships and sales. 

In this type of channel partnership, the customer goes to the vendor to make a purchase, and the partner is paid a fee when the sale is closed.

The best thing about referrals is that the customer is usually more inclined to value the partner's recommendation and buy the product.

Essentially, this partnership allows companies to leverage the partner's existing customer base, an audience they may not be able to reach on their own.

Reseller Channel Partnerships

Resellers are channel partners who acquire your products from you directly to resell to their market with the advantage of keeping all sales revenue.

In this type of channel partnership, customers make purchases from the reseller, which places the reseller in charge of handling all customer support and inquiries.

The benefits of reseller partnerships are that when you work with a reputable vendor, you can easily access their goods and services. Instead of investing time, money, and resources into developing your own software solution. 

It is important to understand that a co-selling arrangement, in which the sales teams of two partners work together to convert potential customers and/or provide value to existing customers, is different from a reseller relationship.

In this type of channel partnership, it may be more difficult to handle product restrictions or pricing flexibility. This is because the vendor frequently has the upper hand over the reseller.

How to Profit from Channel Partners in 2023

Now that you know what channel sales partners are, the next step is to profit from your channel partners.

To do this, you need to have a solid partner onboarding and training program, combined with a well-thought-out partnership strategy.

Below are six steps you can take to make your channel partners profitable.

Step 1: Have a Channel Partnership Strategy

 A well-thought-out partnership strategy can lead to improved sales and profitability. 

Instead of selecting partners at random, you should understand what channel partners want and how their goals align with your business.

To know the ideal partner, ask yourself these questions:

  • Does this partner have the resources to invest in the partnership?

  • Are they willing to reach their goals? 

  • Is there a competence fit? 

  • Is there a culture fit?

Step 2: Build Relationships with Channel Partners

It's crucial to build a relationship with your channel partners that benefits both parties. 

Be Accessible: Your channel partners are your eyes and ears in the public eye. They also promote and sell your business as if you were there in person. Be approachable, express your interest in growing the relationship, and show your appreciation for their efforts.

Teamwork: Your business can benefit greatly from collaborating on marketing and promotional initiatives. It can be a great benefit to see how the partnership markets your business and then make suggestions to them.

Be Sociable: Being active in social groups can help you keep up with the latest trends. Paying attention to what customers want will give you great insights. This will help you adjust your plan and give you an edge over your competitors when you're trying to grow your business. When you use social events effectively, your partnership becomes even more impactful. 

Bring Value: The best strategy for building lasting relationships with partners is to plan how you can help them now and in the future, and how you can use your particular skills and solutions to help them achieve their goals. For example, you can add value by providing marketing tools to ensure that the channel's messages are consistent.

Step 3: Enable Channel Partners

Channel Partner Enablement is the process of improving channel partner practices, knowledge, and capabilities to drive engagement and brand loyalty.

Your company likely uses a channel partner to benefit from their relationships and knowledge of the market or audience in question. 

However, without a solid understanding of your brand and offering, they will not be able to implement an effective plan to promote and sell your offering to their target audience.

Businesses can empower channel partners in key areas like sales training, building industry expertise, and technical training.

When developing your enablement program, keep the following in mind to guarantee that you maximize its effectiveness:

  • Partner-centered: Think of your channel partner enablement program as a product where your partner is the customer. 

  • Partner assessment: Each partner brings a unique set of knowledge, skills, and procedures. Assess the partner to determine what skills they already possess and what they need to successfully market and sell your goods.

  • Partner incentives: Half the battle is getting your partners to participate in your program. Providing additional motivation through incentives will improve participation and adoption of your enablement program.

  • Partner Lifecycle: To be truly successful, your enablement program must provide progressive enablement across your partner's lifespan.

Step 4: Define Business Plans

The key to a successful channel partnership is having a well-defined business strategy that helps you and your partner establish your goals and ensures that you are on the same page.

Gaining the support of the rest of your organization and leadership team requires a channel sales business plan. 

Therefore, creating such a plan is critical before you launch your partnership program. This will help executives understand your goals and the resources required to achieve them.

A worthy example is the Kiflo business plan that enables you to set indirect sales objectives as well as track results. It equally helps partners to focus on business activities that matter. 

With the existence of a business plan, the partner manager can easily track the progress of the partners and take the right action at the right time.

Finally, it's useful to regularly review your channel partner business plan to ensure your goals and efforts are still relevant once you have a program in place.

Step 5: Define Responsibilities and Expectations

When working with a new partner, to make sure that everyone is on the same page and aware of their various obligations during the sales process, you must designate roles and responsibilities.

You should make an effort to be as specific as you can when assigning responsibilities. Make sure to include a list of expectations. What should your channel partners expect from you, and what should they expect from you?

As soon as you are familiar with your list of responsibilities, you can delegate the tasks to your internal team members and channel partners.

Step 6: Sales Support and Account Management 

 Transparency helps facilitate a successful channel partnership campaign. Try to work hand-in-hand with partners to ensure continuous customer success. 

Also, identify roadblocks your partners may face and develop a strategic recommendation to help out.

Remember, as a business owner you can take advantage of multiple channel partners to enter a new market and expand your reach. But while valuable, partner programs can be quite tasking. To effectively manage channel partners, you are going to need a PRM.

kiflo home page

Kiflo is one of the best PRMs you can trust to deliver results all the time. It will help you drive sales growth with partnerships. 

Despite what you need—be it channel conflict management, developing your reseller partner program, or growing your referral partner program, amongst others—Kiflo will always come through for you.

See how Kiflo PRM helps SaaS SMBs to scale, manage and grow partner revenue.

Get a free demo

Frequently Asked Questions (FAQ)

What is a channel partner example?

Channel partners include retailers, resellers, affiliates, channel value-added resellers, service delivery, technology alliance partners, and others. The nature of the business, its size, and other factors affect the choice of partner.

How do channel partners work?

The whole idea of working with a channel partner in the first place is to increase sales and market exposure. In return for the leads generated by the partners, the business will pay the partner.

Who are channel partners?

Channel partners are companies, or individuals in some cases, who partner with businesses for the sole purpose of helping the business sell its product or services.

What is a channel partner strategy?

A partner strategy is what a company uses to optimize its partner network. Every business has a slightly different channel partner strategy. But eventually, every strategy is revenue-focused.

How do you develop a channel partner?

To develop channel partners, you must add value, empower them, and foster connections. The success of your partnership depends on developing approaches that harmonize business objectives.

LinkedIn Twitter Facebook

Start Scaling Partner Revenue Today

Get a personalized demo of our all-in-one partnerships platform.