What are the Different Types Of Channel Partners

Ryan Thompson
July 25, 2022
 Mins Read

“Have an in-depth understanding of the benefits and obstacles of each type to route your focus on channels that streamline with your business agendas and processes.”

Despite having normal economic conditions for the last decade, only a few businesses have opted for an indirect go-to-market strategy, leveraging channel partnership.

However, after knowing the benefits that channel partnerships offer, including enhanced product value, established brand recognition, new market expansion, and scaling up, the demand for channel partners has significantly increased.

Several businesses have started to explore channel partnerships after the upside-down flip of the sales strategies during the Covid-19 pandemic. They shifted to channel partners at those times as their direct go-to-market strategies weren’t yielding much better results then.

Today, a channel strategy has become an effective way to boost your company’s sales and growth.

Here, you’ll get insight on all types of channel partners, which companies are likely to benefit the most from each type, their benefits, and more. So, keep reading.

10 Types of Channel Partners: A Comprehensive Overview

1. Channel VARs or Value Added Resellers

Channel VARs, also known as Solution Providers, are the most common and famous channel partners.

In simple words, your product will be taken by the channel resellers; they’ll add a profit margin to it and add value in several ways to deliver it to end customers.

They can be your local business partners holding expertise in specific geographic areas, with sufficient reach to keep up with an extended customer base. Other partners hold expertise in specific industries or vertical markets like healthcare.

Channel VARs are mostly responsive and flexible to the latest advanced technologies, enabling small to medium-sized businesses to market their product and services faster and better.

The primary benefit of having Channel VARs is that it sells your solution to their current customer base to boost your sales significantly. They also tend to advertise your products and services faster.

Solution Providers or Channel VARs are ideal for businesses that:

  • Need access to a wider market
  • Have planned to launch a new technology on the market
  • Need to expand their market
  • Lack of resources for scaling up their sales and marketing efforts
  • Wants to diversify into specific vertical or regional markets            

2. Service Delivery Partners

It’s imperative to know that a service delivery partner will not help you resell any software or product.

Its core function is to improve its value to the customers by ensuring services like installation, pre-sales consulting, and managed services. In addition, they personalize the business solution to make sure it fits the unique needs of the end customers.

For instance, a service delivery partner can ensure the building and arranging of a patient management system to meet the needs of cosmetic clinics.

The key benefit of these services is that it uplifts the overall appeal of your company’s products by lowering the challenges of implementation and boosting the relevance and value to a specified market. They also increase the rate of product absorption to the customers, boost future sales, and enhance end-user satisfaction.

A service delivery partner is ideal for businesses that:

  • Lacks resources to develop and maintain an extensive in-house service department
  • Needs to improve end-user customer satisfaction and experience
  • Needs to partner instead of competing with recognized service experts
  • Lack of reputation or expertise within the necessary vertical

3. Technology Alliance Partners

These partners bring technology to the table that appreciates the solution offered by your business. Like service delivery partners, this partnership also avoids reselling. Instead, it integrates two products to provide a single solution.

For instance, if you’re selling software for X-ray devices, you can decide to collaborate with a company that produces and sells the X-ray machines themselves. With an alliance partnership, you’ll enjoy enhanced technology by including software, features, or accessories that give a competitive edge.

The main benefit of this partnership is that your business and its technology will leverage the collaboration with a reliable partner, and the technology will surpass a new market horizon. In addition, your business will also enjoy enhanced visibility due to co-marketing activities.

A technology alliance partner is suitable for a business that:

  • Seeks benefit from technology integration of the two firms
  • Seek benefit from collaboration with a reliable brand
  • Could seek help from co-marketing occasions
  • Need to surpass new market horizons

4. Fulfillment Partners/High-Velocity Partners

These partners can help your enterprise handle the contractual and administrative obstacles of selling your products and solutions at scale. Although they don’t add any value with personalized services, they take care of your order fulfillment needs at a reasonable rate to manage a high volume of transactions.

Thus, a fulfillment partner can help your business significantly boost sales at low administrative costs. The best fulfillment partner can also help your organization sell products and services to a hard-to-access and reach the market via existing government contracts.

Such a partnership is ideal for businesses that:

  • Needs to scale up quickly to acquire huge sales volumes
  • Have the requisite resources in-house
  • Keeps up with high transactional volumes
  • Sells products that are easy to install
  • Requires a mediator to transact and contract on their behalf

5. Cloud Service Providers

Although these partners won’t resell any of your products, they offer a few elements of cloud computing like PaaS, SaaS, or IaaS. In addition, they host your solution in the cloud to enhance flexibility, security, and speed. Some examples are Google Cloud Services (GCS), Microsoft Azure, and Amazon Web Services.

Also, you’ll find BICs or “Born in the Cloud” providers that offer solutions from one of these cloud providers, enabling end-users to enjoy enhanced solution elasticity and flexibility while untangling the categorization and stationing of those services.

If you’re an IT company, hiring a cloud service provider will help you deliver a reliable and effective solution to the user in a streamlined way with its off-premise hosting feature.

Anyways, a cloud service provider is ideal for businesses that:

  • Needs to scale up by leveraging the brand reputation and market impression of the top 3 cloud providers (Google, Microsoft, and Amazon).
  • Possess a software product that can leverage the benefits of cloud hosting.  

6. Managed Service Providers

These partners ensure remote management of end-user systems and IT infrastructure.

They typically provide such services under a flexible subscription model and proactively. As a result, these service providers ensure ongoing benefits to your business by significantly reducing the load on the end-user continuously.

A managed service provider alleviates the administrative and technical resources needed by the end-user to enhance your software solution and make it more appealing to a significant number of end-users.

A managed service provider is ideal for businesses that:

  • Needs to enhance retention by streamlining the overall end-user experience
  • Needs to boost sales by ensuring effortless and efficient setup and management
  • Needs to increase the opportunities for cross-selling or up-sell

7. GSIs or Global Systems Integrators

GSIs are involved in developing computing systems by integrating software, hardware, storage, and networking products from different vendors. These channel partners develop large, intricate, multi-vendor solutions for big companies.

The key benefit of hiring such a channel partner is that when other channel resellers help you sell products and solutions to SMEs, system integrators help your business reach and sell to the profit-making enterprise market.

This channel partner is best for companies that:

  • Have access to a better solution than a legacy product currently being used by the integrator
  • Offers a solution that needs additional services
  • Are all set to give their solution on the scale needed to service a vast market
  • Needs to get their solutions to blue-chip enterprises

8. White Label Partners/Embedded Partners

A white label partner or an embedded partner fix and embed your solution for selling it to the end customers under their brand name.

Enabling other brands to “white-label” and sell your products is an effective way to boost sales for businesses focused on growth and expansion with a little cost of sales.

These partners are best for companies that:

  • Wants sales growth more than its brand recognition
  • Needs a quick, simple, and effective way to boost sales
  • Lacks internal bandwidth to offer managed services to end customers  

9. Original Equipment Manufacturers (OEMs)

OEMs or Original Equipment Manufacturers submerge your products into their solutions to ultimately sell them to customers. OEMs use their brand name to sell integrated embedded solutions like white label partners.

One of the key benefits of using OEM partnerships is that it enables businesses to explore new market horizons for their unique applications and products. These channel partners are best for companies that:

10. Strategic Partners

You may find strategic partners to be covered under one of the many categories mentioned above, but what makes them unique is their capability to bring in revenue and offer value that assists your business strategy. They may be ideal for playing the role of multiple partner types, and the role may evolve and get better with your evolving business goals.

For instance, a fulfillment partner can help your business expand over the country. It can also offer managed services to boost your customer’s lifetime value. So, you must be open-minded and consider every partner to be potential enough to fulfill the company’s strategic goals.

Bottom Line

Collaborating with one or more channel partners can be highly effective in boosting your business growth and expansion. However, things can become costly and hectic when you get involved with too many. Thus, your goal should be to hire a strategic channel partner that takes care of all your business needs like Invensis. If you’re only starting to utilize a channel, then Invensis can be the best choice, as turning up to different routes to the market can be burdensome.

Let Invensis Be Your All-In-One Channel Partner

At Invensis, we spend time with the clients to align with their needs and technology. Our experts always appreciate the technology brought forward by the clients, embrace it, and utilize it for their business scaling and expansion. We understand the need for infrastructure development and IT management and happily associate with clients to cater to those needs for a step forward to growth and success. So, let Invensis be your comprehensive channel partner solution to scale your business.

Frequently Asked Questions -

1. Why do businesses need channel partners?

Businesses need the best channel partners to leverage their adequate market knowledge, sales expertise, distribution channels, and customer relationships to sell their products, services, or solutions successfully.

2. What do you exactly mean by a channel partner strategy?

A channel partner strategy is a highly effective solution to sales and marketing that leverages third-party partners for marketing their products and solutions.

3. How do channel partners get paid?

Channel partners are organizations or agencies that control any business’s selling services. For this, the channel partners get a predetermined fee or commission.

4. What makes Invensis your great channel partner solution?

Invensis is a one-stop destination for businesses to provide comprehensive hardware, software, and service solutions to help them climb the ladder of success.

5. Why does Invensis stand out as a successful channel partner solution?

Invensis stands out as a successful channel partner solution as it ensures:

  • Technical assistance
  • Enhanced skills and expertise
  • Partnership mentality
  • Market Focus and more

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