Channel Marketing Defined

Channel marketing can broadly be defined as a vendor's use of intermediaries, or channels, to get their products or services to consumers. There is usually a price markup in the channel sales process, which allows partners to make a profit without taking too much of a cut from the vendor's profits. In some cases, channel marketing also includes the addition of value to the product or service that benefits the consumer. Channel sales sometimes involves an entire value chain or partners, it often only includes two levels.

Channel management is obviously much easier when there are only two levels to the vendor-partner chain. This type of channel marketing is very common in the technology commodity market, for example, such as hardware or boxed software vendors. These types of businesses must turn to channel sales to get their products to users, since providing customer service, handling orders and logistics are not their specialties. Channel marketing is also part of the retail chain, since the companies that sell goods in the stores we shop at must rely on their channel partners to distribute their wares. Effective channel sales require input from the vendors, and training for the partners on how to effectively market the products. Channel management requires organization, tracking, support and good old fashioned salesmanship.

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