November 08, 2021

What Are Channel Partners & How To Profit From Them in 2022

Channel Partnerships are a new way to generate revenue for your business in 2021 and that you can take advantage of it. Learn what they are!


Channel partnerships are a great way to break into the prime markets and verticals. Without channel partnerships, you’d find it quite difficult to get there on your own. After all, the aim of doing business is to grow and increase profit.

To grow 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.

So, what are channel partnerships, and how can you profit from them? Read on to find out more about it.

What Are Channel Partners?

A channel partner is a company that partners with a software vendor or manufacturer or producer to market and sell the software, technologies, or manufacturer’s products.

This is done through a co-branding relationship. distributors, value-added resellers, referrals, retailers, and other such organizations.

This partnership allows businesses to leverage the existing customer base of the channel partner such that the business can expand its customer base.

But this often comes at a cost of having to give products or services at a discounted price to these partners. Note that the increase in sales volume will make up for the reduced profit margin in the long run. 

However, what is most important to the success of this partnership is to work closely with partners to ensure all is going as planned.

what are channel partners

Type of Channel Partnerships

What are channel partners in sales, and why are they important?

To summarize, they sell for you, which can set you up for long-term, consistent profits while you focus on other things.

Below are three main types of channel partnerships—those partners who are most important to your business.

Reseller Partnerships

are those who buy your products directly from you. After selling the products, they keep whatever profit they make from the sales. In this type of channel partnership, customers go to the reseller to make a purchase. In other words, the reseller is responsible for managing the customers.

Referral Partnerships

A is a company or a person who refers a lead to a vendor. In this type of partnership, the customer goes to the vendor to make a purchase, and the partner is paid a fee when the sale is closed.

Referral channel partnership is focused on boosting customer relationships and sales.

Affiliate Partnerships

Affiliate partners are those responsible for affiliate marketing or promoting products. Affiliate partners are paid for when the sales are closed.

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

How to Profit from Channel Partners in 2022

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

To profit from channel partners, you need to have a solid onboarding and training of partners program combined with a well-thought-out partnership strategy.

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Below are five 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. You shouldn’t choose partners randomly, but understand what channel partners want and favorability 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

Create a mutually beneficial relationship with your channel partners. Ideally, what you should seek is a symbiotic relationship with your partners.

Develop or revamp your business partnership program such that it will be easy for partners to understand. Achieving this means developing agreements with those partners who’re likely to make it worthwhile.

Step 3: Enable Channel Partners

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

When you invest in your partners, they can achieve high productivity and returns. Going the extra mile to empower your partners helps make the relationship more valuable.

Step 4: Define Business Plans

A well-defined business plan is needed for a smooth-sailing channel partnership. Business plan helps to define objectives with the partner in order to be sure you are on the same page. 

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.

Step 5: Sales Support and Account Management 

Transparency helps facilitate a successful channel partnership campaign. So, try to work hand in hand with partners to ensure customer success in a continuous process. 

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

In conclusion, as a business owner, you can take advantage of multiple channel partners to enter a new market and expand your reach.

But when you do, managing partners can be quite tasking. To effectively manage channel partners, you are going to need a PRM.

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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. 

Irrespective of what you need—be it channel conflict management, developing your reseller partner program, 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.

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Frequently Asked Questions (FAQ)

What is a Channel Partner Example?

As a business, there are different types of channels you can choose to partner with. Channel partners include retailer, reseller, affiliate, channel value-added reseller, service delivery, technology alliance partners, and others. The nature of business, its size, and other factors affect the choice of partner.

How do Channel Partners Work?

The working principle of each channel partner is different, but they maintain the same pattern. 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. The type of channel partner will determine how the partner gets paid.

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 their product or services.

What is a Channel Partner Strategy?

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

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