What is Channel Sales?
Channel sales is a go-to-market model where a company sells through third-party partners, resellers, distributors, or referral networks rather than (or in addition to) its own direct sales team.
Channel sales lets you extend your market reach without proportionally growing your own sales headcount. Partners take on the selling, implementation, or customer management in exchange for a margin or referral fee. It's a capital-efficient growth strategy when executed well, and a margin-destroying mess when executed poorly.
Types of Channel Partners
There are several channel models. Resellers buy your product and sell it to their customers at a markup. Referral partners send you qualified leads for a fee (typically 10-20% of the deal). Technology partners bundle your product with theirs. System integrators implement your product as part of larger projects. Managed service providers (MSPs) sell your product as part of an ongoing service. Most companies start with referral partnerships before building a full reseller program.
Direct vs Channel Sales Economics
Channel partners typically take 20-40% margin on deals they source and close. That sounds expensive, but compare it to the fully loaded cost of a direct AE ($200K+ OTE plus benefits, tools, management overhead) who can only handle so many deals per quarter. For companies expanding into new geographies, verticals, or segments, channel is often more capital-efficient than hiring.
Channel Sales in CRO Job Postings
CRO Report data shows 15-20% of VP Sales and CRO job postings mention channel, partner, or alliance experience as a requirement. That number jumps to 35%+ for companies in cybersecurity, infrastructure, and horizontal SaaS where partner ecosystems are mature. CROs at these companies need to manage both direct and channel motions, which requires different comp plans, conflict resolution skills, and partner enablement programs.
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