Direct or Indirect sales ?

Indirect sales through partners, is a strategic possibility for growth and incremental sales for vendors. Though invaluable, no direct sales force, can hope to achieve the same coverage and breadth of expertise as an effective channel partner network. For sustainable growth, vendors and distributors are looking beyond their internal resources to extend their sales opportunities with the right partners. The question to go direct, indirect or both is often determined by the following:

1) Ability to recruit resellers. If you cannot get your product into distribution, or find resellers, the answer is simple, you go direct.

2) Product type. If you are selling a product that requires a lot of training, installation and support, you may go direct until you get your resellers trained and certified--or, if you have a large enough sales force, you may stay direct. However, if you have enough sales people to only cover the largest customers (10 sales people to cover top 100 telcos, but not enough to cover the middle 5,000 telcos), you may wish to use resellers to cover the middle market--then segment your product line, one for direct and one for resellers.

3) Market dynamics. As the market technology adoption changes and products that used to require support become easier to use, and customers know what they want--you may go direct (like Dell (it was actually a modest model in the early days, since most users needed more support but became effective

4) Price point. High-end premium quality consumer products (such as expensive cookware, the best vacuums, etc.) are sometimes sold direct (and usually person-to-person) since the benefits (which are real, but not always obvious) must be sold. However, this does not mean that high-priced products can’t be sold via the channel (boats, planes, million dollar SFA products, etc.).

5) Customer requirements. Some customers require mandate a direct relationship with the vendor to ensure their needs are met. In some cases, when an account insists on going direct, the reseller can still earn a bounty for delivering the qualified, pre-sold lead.

6) Ability to manage resellers. Much of the decision to go direct or indirect is also dependent on the companies ability to understand how the channel functions, come up with a competitive program, and manage the reseller programs and relationships.

The final decision on direct or indirect is based on your business model and how you address the questions above.

Regards Mark