Rethink Commerce Blog

Affiliates, Resellers, Vendors – Who Gets the Customer?

Posted on October 16th, 2008 by

How can one get a channel distribution as conflict free as possible, that generates both online and offline software sales and in the end it makes everybody involved happy – resellers, distributors, affiliates and vendors?

First of all, in case you are wondering why am I writing about selling software offline on an eCommerce provider blog, well, it’s because unlike other providers,  we also have ARMS (Avangate Reseller Management System) – a standalone Partner Relationship Manager system.

I will try to keep it short (I’m running out of coffee) and not write about ARMS (ARMS does this and ARMS that. You can read this on our website anyway).

At a first glance, online sales and channel distribution are competing over the same customers so I want to focus here on when is good to use offline resellers and distributors, potential conflicts with online sales and give you an article to read about solutions to these conflicts.

Most software vendors that already sell online think about channel distribution, handling resellers and distributors, as an un-necessary overhead. Indeed if you just started up, you should stick to online sales, but it would be good to use resellers as soon as possible.

Let’s think about your sale force. You have the site which is your 24×7 sales guy and probably a variable size sale team that pitches buyers, answers phone calls, takes care of invoicing and so on. In the best case scenario, you have localized your site to target local markets, still, you need to get everybody to the one single focal point – your site (and your sales team behind it). Now, let’s say you have one million potential customers, what rate of success could you have in getting them all to your site? What would you say about having more entry points?

So when is it a good idea to distribute your software through resellers and distributors?

  • When you could use the resellers’ sale force to approach local markets (let them make the sale to the final customer)
  • When you want to take advantage of the reseller position in a certain market and share risks and opportunities with them
  • Your software can be packed with additional services provided by the resellers for the end user benefit
  • Take the load off your support team (resellers could do support locally)

Where can conflict arise?

  • affiliates ‘stealing’ online customers from resellers
  • end-customers buying directly from vendor’s online store
  • multiple resellers in the same territory fighting for the same clients
  • vendor trying to expand faster than the resellers can cope with
  • vendor and reseller located across continents, making communication between them more difficult

Solutions?

…rest at ease:
Software distribution channel conflicts CAN be solved!

Find out how to protect your channel and make the best of it – read full article that my colleague Delia has prepared.  Time to get another coffee!

How do you deal with these issues? Please share your perspectives via comments.

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Cristian Dorobantescu

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Comments (3)

  • Internet Marketing » Blog Archive » Blog Software Search Engine Results says: October 16th, 2008 at 5:10 pm

    […] Affiliates, Resellers, Vendors – Who Gets the Customer? […]

  • Discount coupons for affiliates | Avangate Blog - Software Business Blog says: March 5th, 2009 at 4:54 pm

    […] using coupons eating up the sales you would anyway make. Funny enough, most companies that complain about affiliates doing the sales they would anyway do are companies that don’t really sell through affiliates or didn’t even […]

  • Joonas Toivonen says: July 25th, 2011 at 1:09 pm

    This was actually a good post that I had never before thought off. Even though I don’t see a possibility where affiliates STEAL customers as I’ve always suppoed the affiliates and the networks work together. Perhaps it’s just the Finnish market that is still underdeveloped.