What does it mean to purchase from the channel

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No this is one that really confused me when I first started out in IT and sales of technology related equipment and software, What is the channel?

I was actually using the channel and all of these thing I was reading were talking about the channel, for those that know what it is it’s quite simple but for those that are not really sure what the channel is then you are probably in the same boat as I was when I first started my career, and just wondering What actually is the channel? and really what does it mean to buy from the channel and how do I buy from the channel?

If you are selling computers or phone systems or just working in public sector IT then you are more than likely  you are using the channel and do not even know it. I know I was using the channel long before I knew what the channel actually was.

So really what is the channel?

The channel is just short for “Distribution Channel” this is sometimes known as a “Disti“(pronounced “dis-T “)or “Distributor” , what the distribution channel actually is, is when software or hardware manufacturers/developers want a way to go to market that they don’t want to deal directly with sales then they use a third party to actually sell the product, be it a physical or a “Virtual”(or software) product. This is what is called the distribution channel. The distribution channel is basically just the way it ends up at the end user, usually through intermediaries much like how people buy from a wholesaler then sell the product at the retail price to the end user. with most products in the IT world they do go through a distribution channel(otherwise referred to as “THE CHANNEL“) to end at an end user. A really popular one for this is Microsoft, if you want to purchase whole sale off Microsoft you need to go through the distribution channel to get licenses.

Many other large brands use the channel as well, brands like:

  • Lenovo
  • Cisco
  • HP
  • Acronis
  • Adobe
  • McAfee

Why do companies choose to sell through the CHANNEL and not direct?

It can work out quite well for companies to use the distribution channel instead of selling direct to end customers for the following reasons:

  • Manufacturers/Developers do not have to worry about 1000s of purchase orders coming in every month because someone else is looking after the supplying of the product leaving the company to focus on support or developing new features and also this allows for a lot less book keeping.
  • Sort of like the “As A Service” model where you are just outsourcing your distribution to another company that has a well formed process(hopefully, this isn’t always the case in real life) for distribution of your product.
  • People already have relationships and accounts with their chosen distributor, this means that the distributor probably has more chance of convincing the re-seller to get on board with the pro.

Some companies still go with the direct selling model but from my experiance, unless you need really big volumes of the software or hardware(like tens of thousands of users) then most vendors will not want to know you they will just refer you to the distribution channel.

How to find the proper distribution channels for products that you(or your business) want to resell

  • The best way to find the proper distribution channel for a product is to just contact the manufacturer or the developer directly and ask “Who are the distributors in my area for your product, I am quite interested in selling it”. In my experiance, 99% of the time they will point you in the right direction. Email usually works fine, but if you do not get a reply then just ring them and ask.
  • If you don’t want to ask directly then most countries will have some sort of distributor directly that lists “official distributors” for products. In Australia there is an excellent site called ARN that has a huge list of distributors for Australia, you will need to find a similiar one for you country though as I only know the one for Australia.
  • GOOGLE….. Yes thats right as always google is your friend here, if you want to find the distributor for a product you usually will just need to type in the product name, the country and the word distributor. Example of this would be that I just typed is “cisco distributor england” and one of the top ranking sites was http://uk.comstor.com/. Now I don’t know how reputable they are as I do not live in England but from the look of them they look like some sort of distribution channel.
  • A lot of vendors will also have the distributor listed publicly on their website. Take YeaLink for example http://www.yealink.co.uk/Distributors

 

So I hope that answers the question to what THE CHANNEL actually is. If you want to connect with me or have any questions feel free to hit me up on google+ or twitter, I’m on both or just comment below 🙂

 

 

Just FYI I would have prettied this post up with a few pictures and stuff but I really couldn’t find any pictures to go with the subject that were fee from copyright.

Author

Jake Gardner

Jake is an IT Consultant/Systems Engineer that works for a business that offers services to SMB clients. He runs his own business that delivers solutions geared towards online marketing and web design.

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