What Is the State of Your Channels?

Business sales have always been driven by channel relationships. If you are a product manufacturing company, it’s highly likely that a number of strategic partners come into play when bringing goods to market. These could be logistics partners, distribution companies, wholesalers, value-added resellers (VARs), or retailers. The same holds true if you are in the services or software space.

Sales in these markets are driven through channels that are typically managed by larger software firms, consulting companies, or systems integrators.

So how are companies applying technology to improve these business relationships? And where are companies finding opportunities to apply e-business strategies to strengthen the quality of their channels?

The Manufacturer

Seagate Technology has developed a very interesting solution for collaborating with channel partners. It’s called the “Seagate Reseller Marketplace.”

This Web-based order-management portal enables business buyers to procure Seagate products from a network of registered resellers. Customers can view available inventory, compare prices, and initiate the order submission process from the site. For Seagate, this system enables greater control over its brand and circumvents channel-conflict issues that normally arise from a manufacturer’s e-commerce efforts.

For the resellers, the advantages of joining Seagate’s network are clear. It provides a simple solution to acquiring customers specifically interested in Seagate products, and the site lowers transaction costs by automating business processes associated with a sale.

The Distributor

Tech Data Inc. is one of the leading computer-product distribution and logistics-management companies in the world. Its Web site has been designed primarily to support its channel relationships. In fact, it is refreshingly devoid of any marketing content.

Behind the scenes, Tech Data is attempting to automate order management and fulfillment processes through this online channel. Through the site, resellers and VARs that procure product from Tech Data can view catalog information, configure orders, and track the progress of shipments.

In addition to supporting XML-based methods of order submission, the site also supports traditional forms of electronic transitions, such as EDI (electronic data interchange) and FTP (file transfer protocol).

The Software Company

San Jose-based BEA Systems Inc. is a well-respected company within the software and e-business application industry. Its stature can be attributed to the effort it invests in cultivating business relationships with its strategic partners. Channel management for independent software vendors (ISVs) such as BEA requires strong support for service companies that deploy their solutions.

ISVs looking for a solid plan to manage partners could borrow a page from BEA’s approach in creating an “ecosystem” around its product offerings. One aspect of this strategy is BEA’s PartnerNET. Through this online channel, consulting companies, systems integrators, and independent developers can register for product information, training, marketing content, technical support, and a number of other services.

Although there may be nothing novel related to the intent of PartnerNET, the depth of content and the quality of information differentiate its service from those of competing companies. The site is continually updated and provides useful reference guides and software downloads.

The Key: Collaboration

The examples I list above provide only a snapshot of how companies are using the Web to catalyze their channel relationships. A few themes are clear and serve as good guidelines for other companies attempting to tackle the channel relationship issue:

  • Collaborate, don’t compete. Strategies that attempt to leverage existing channel relationships, rather than cannibalize them, tend to succeed.

  • Start small, building as you go. Your offline channel took years to develop, so you shouldn’t expect to deploy your online channel management solution overnight.
  • Understand that your partners are the users. Developing your channel management strategy should be a collaborative process. Successful efforts often start by bringing your partner into the decision-making process.

If your company is looking to develop a channel management strategy, and you would like to discuss some options, I would like to hear from you.

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