10 Types Of Channel Partners

Channel partnership are crucial in marketing. It helps brands reach to people & drive sales. But what are channel partners, and how can they benefit your business? More importantly, how do you pay these partners and find the right ones for your industry? 

This guide explores 15 types of channel partners!

What is a channel partner in marketing?

In marketing, a channel partner refers to a third-party organization or individual that helps promote, sell, or distribute your products or services. 63% of marketers say that channel partners can improve their sales cycle. Through these partnerships, you don’t have to mange sale process yet get access to new customer.

Channel partnership is the middleman between your brand and the customer. They help extend the sales cycle, promote your products. Also, they can help at products distribution, customer support, or technical problems. In other words, the main function of channel partner is to take your product and present it to its audience!

There are 03 ways to pay channel partners:

• Commission-based model: Partners receive a percentage (%) of the sales they help generate. This changes depending on the product, volume, or market.
• Profit sharing: Some partnerships involve sharing a portion of the profit rather than the sale revenue.
• Flat fees: Some partners may receive fixed payments for doing specific tasks or services. For example, product installation or ongoing support.

To effectively manage commission-based channel partnership, Shopify stores can use platforms like BixGrow. BixGrow helps you track and automate affiliate programs at most affordable price!

10 types of channel partners

There are many types of channel partner. Each offers unique advantages. In this section, we will explore the channel partners list, their benefits, compensation models, examples, and tips on where to find them.

1. Referral partners (Including affiliates)

Referral partners, such as affiliates, help drive leads and sales through their networks or online platforms. It is a cost-effective channel partner strategy and provides measurable results since you only pay for actual conversions. Some examples of referral partners are bloggers recommending products in niche markets or influencers sharing affiliate links on social media.

• Channel partner compensation model: Commission-based. Partner earn a portion of revenue for each referral.

Where to find them:

• Affiliate marketing networks (e.g., ShareASale, CJ Affiliate).
• Social media platforms (e.g., Instagram, YouTube).
• Influencer marketplaces (e.g., Upfluence, AspireIQ).

As this strategy low-cost, brands tend to find as many partners as possible. You can have a network with hundreds of affiliates & referral partners. But partner management tools make it easy

The hardest part of working with referral partners is partner management. For instance, with tools like BixGrow, you can automate commission tracking and payouts, making the process seamless and transparent.

2. Distributors

Distributors manage inventory and handle logistics. With distributors, brands can grow their brands without managing intensively supply chains. For example, electronic distributors supplying gadgets to retail stores or FMCG distributors delivering goods to supermarkets.

• Compensation model: Profit margins. Distributors purchase products at wholesale prices and sell them to retailers or end-users at a markup.

Where to find them:

• Trade shows and expos.
• Online directories like ThomasNet or Alibaba.

3. Agents/Brokers

Agents or brokers act as intermediaries, helping businesses connect with potential customers or suppliers. Their local expertise and industry connections are invaluable.

• Compensation model: Commission-based, typically a percentage of the transaction value.

Examples:

• Real estate brokers securing property deals.
• Insurance agents selling policies on behalf of providers.

Where to find them:

• Industry associations.
• Channel partner companies
• Professional networks like LinkedIn.

4. Dealers

Dealers maintain local presence and customer relationships, making it easier for brands to penetrate regional markets.

• Compensation model: Profit margin. Dealers purchase goods at a reduced price and sell them at retail value.

Channel partner program examples of dealers: 

• Automotive dealers selling cars from manufacturers.
• Equipment dealers offering specialized tools to businesses.

Where to find them:

• Regional trade associations.
• Manufacturer websites listing authorized dealers.

5. Value-added resellers (VARs)

VARs enhance the value of a product by bundling it with additional services or customizations, offering tailored solutions to customers.

• Compensation model: Profit-sharing or markup on the final bundled product or service.

Examples:

• IT firms bundling hardware with custom software solutions.
• Security companies integrate cameras with monitoring systems.

Where to find them:

• Tech conferences.
• Industry-specific directories.

6. System integrators

System integrators specialize in combining multiple systems and technologies to create seamless solutions for customers. They are particularly valuable for businesses in industries like IT, manufacturing, and logistics that rely on complex setups.

• Compensation model:

Project-based fees or commissions, depending on the scope of the integration.

• Examples:

• ERP consultants integrating software across different departments.
• IT integrators combining hardware and software for enterprise solutions.
• Where to find them:

• Industry forums and associations.
• LinkedIn groups focused on IT and tech services.

7. Franchisees

Franchisees expand your brand’s reach by operating under your name while taking on the investment and operational risks. This model allows businesses to scale rapidly with reduced costs.

• Compensation Model: Royalties (a percentage of revenue) and initial franchise fees.

Examples

• Fast-food franchises like McDonald’s.
• Fitness franchises like Anytime Fitness.

Where to find them:

• Franchise expos and fairs.
• Online franchise directories like Franchise Direct or Franchise Gator.

8. Independent software vendors (ISVs)

ISVs create software solutions that complement your product, often filling niche needs and enhancing overall customer satisfaction.

• Compensation Model: Licensing fees, subscription revenue sharing, or profit margins.

Examples:

• Developers of CRM plugins for Salesforce.
• SaaS providers offering integrations with accounting platforms.

Where to find them:

• Software marketplaces like AppExchange (Salesforce) or Shopify App Store.
• Developer communities and forums.

9. Managed service providers (MSPs)

MSPs offer ongoing services like IT support, network management, and cybersecurity. They are especially beneficial for businesses without the resources to maintain these services in-house.

• Compensation model: Subscription-based revenue or annual contracts.

Examples:

• Cloud service providers offer storage and backup solutions.
• IT firms managing enterprise networks and endpoints.

Where to find them:

• MSP associations like CompTIA.
• Tech summits and conferences.

10. Resellers

Resellers purchase your products in bulk and sell them to end customers or other businesses, helping you access new markets with minimal investment.

• Compensation model: Profit margins, with resellers purchasing at wholesale prices and marking up for retail sales.

Examples:

• Electronics retailers like Best Buy.
• Office supply companies sell directly to businesses.

Where to find them:

• Wholesale marketplaces like Alibaba.
• Retail trade shows and expos.

Shipping is now easier for businesses, thanks to better logistics. This makes affiliate marketing more popular. With tools like BixGrow, companies can work with partners worldwide, offering lower prices and faster delivery to customers.

What does ”Channel” in marketing channel means?

In “channel partners,” the word “channel” refers to a path or way that products or services move from a business to its customers. Channel partners are companies or individuals that help a business sell, distribute, or promote its products. They act as a bridge between the business and its customers.

For example:

• A retailer is a channel partner that sells products in stores.
• An affiliate is a channel partner that promotes products online and earns a commission for every sale.
• A distributor is a channel partner that delivers products to different locations.

In short, “channel” means the route used to connect a business with its customer

Wrapping it up on channel partner 

Channel partners help businesses grow, reach more customers, and offer better services. Referral partners bring in sales, system integrators make technology easier, and logistics partners improve delivery.

Tools like BixGrow make it simple to manage these partnerships. With better shipping, businesses can work globally, making partnerships, especially in affiliate marketing, more important than ever.

Ready to take your business to the next level? Start exploring these channel partner types, build strong relationships, and watch your business thrive in today’s competitive marketplace.