How to structure a channel partner or reseller programme

A channel partner or reseller programme allows other companies to sell your product or service to their existing clients — extending your reach without adding your own sales headcount. Done well, it multiplies your distribution significantly. Done poorly, it creates channel conflict, unhappy partners, and reputational damage from poor partner-delivered quality.

Define what you're asking partners to do: are they referring leads (introduction only), reselling (selling your product under your brand), or white-labelling (selling your product under their brand)? Each model has different economics, different quality management challenges, and different contractual requirements.

Partner qualification is the first critical decision. Not every company that wants to resell your product should be allowed to. A partner who represents your brand to their clients is an extension of your reputation. Qualify partners on: their client base quality, their commercial capability, their technical capability (if relevant), and their commitment to representing your product correctly.

Partner economics must motivate the right behaviour. A partner who earns 10% commission for a referral that they invest 5 hours developing will not invest 5 hours. Partner compensation should reflect the effort required and the value of the relationship they're introducing. Margins of 20–30% are common for resellers; referral fees of 5–15% are common for introduction-only arrangements.

Training and enablement: a partner who doesn't understand your product will misrepresent it, sell it to the wrong clients, and generate service problems that damage your reputation. Invest in partner training — how to identify a good prospect, how to position your product, what the common objections are and how to handle them, and what the onboarding process is for new clients.

Partner agreement: every channel partner should sign an agreement covering: territory or market segment (to avoid channel conflict), pricing (minimum resale prices to protect your brand positioning), training requirements before selling, brand usage guidelines, and termination provisions.