Channel Sales
Let’s talk about Channel Sales. Selling through third-party partners (commonly Distributors and Resellers) is a common business model, especially in the IT industry. Let’s see how Salesforce works based on the example of the IT license business.
Channel Sales Actors
In the model where sales are executed by Channels, let’s assume the following parties:
- License Provider (a party that produces the goods that are then being sold to the Distributor)
- Distributor (first-line partner)
- Reseller (second-line partner)
The license provider collaborates very closely with the Distributor as the first-line partner, supplying the goods. The distributor’s role in the process is to purchase the goods from the License Provider and then to distribute it to the Resellers. Distributors are also often handling product marketing. Because of the exclusive character of the relationship between the Distributor and the License Provider, it also specifies the product availability and prices on the given market. Usually, we have no more than a few Distributors operating in a given area. There are businesses with a default Distributor assigned by Country, Region, or Product Type.
Distributors hold the License Stock bought from the License Providers to be available for Resellers. The reseller’s role in the process is also to distribute the licenses, but at the granular level – resellers provide licenses for End Users. The Reseller’s task is to find the End User and sell licenses, gaining some Reseller Margin.
The key to the effective execution of Channel Sales is a close collaboration between each of the described parties, which must share information regarding Proposals, Partnership Agreements, and Orders with the other parties involved. However, companies are often facing challenges with information flow in such a setup, which may lead to inefficiencies, lower sales or pricing, and discounting errors.
The solution
This Business Scenario is a great use case for the Salesforce CPQ combined with Salesforce Partner Community. It gives you great visibility of your business and may be an efficient way to boost your Channel Sales.
Collaboration
Using the Salesforce Community for Partners, you gain full visibility of your business. The direct collaboration between Resellers, Partners, and Channel Managers is unified on one platform. Each party has access to the most important data when needed.
Discount Management
Salesforce CPQ offers out-of-the-box functionalities that are the right solution for Discount Management. The Quotes created for the Resellers (or by the Resellers themselves!) are getting appropriate discounts based on the Agreements that are stored in the system. Distributor or Reseller Discounts are assigned and calculated dynamically. Each side of the Business has clear information on the discount and margin they can get!
Quotes
With Partner Community combined with Salesforce CPQ, you can share the CPQ Line Editor with Community users and make your partners do the Quotes for you! The Partners may even place orders directly in your system! What is more, you can boost Channel Sales by running Partner marketing activities or Partner Discount Programs (such as additional discounts for special volume orders) directly from Salesforce.
Sales Process Integration
Salesforce CPQ out-of-the-box also supports the key Contract Management flow. The Renewal Quotes that are created automatically for expiring orders are waiting for partners to be accepted and re-ordered! The amendment flow provided by Salesforce CPQ lets you manage the ongoing orders too!
Let’s talk about billing and the implementation of Salesforce CPQ in your company. Contact us!
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Article by Paweł Zagraba.
