Whether to be a channel partner OR sign-up for an affiliate program OR opt for being a reseller instead? These and many such questions do arise when choosing between the three.
There has been a lot of confusion observed amongst netizens with reference to the difference between affiliates, resellers/distributors and channel partners. Though there are certain fundamental differences between them, which we’ve tried to describe in the article below.
Let’s first try and understand the definitions from WikiPedia about the three :
Who are Affiliates?
Who are Channel Partners?
Who are Resellers/Distributors?
All-in-all, be it affiliate marketing, channel partnerships or reselling the services of a parent company, the core of everything is that they are income streams for the three and the parent company.
Affiliates Vs Resellers Vs Channel Partners
Affiliates are more of an Internet based concept wherein an affiliate marketer would promote the services and/or products offered by the parent company online. You can say that they do more of pre-sales tasks, driving visitors and prospects to the products pages of the brand.
Whereas resellers might indulge into conversations with the end-user prospects, resolve their queries, answer phone calls, take care of invoicing, at-times offer after sales support (which includes sales as well as technical).
One of the primary advantages of being a reseller is that, they can resell the services by adding a layer of profit margin before reselling the product to the end users, ie. they have the privilege to decide the cost at which they intend to resell to their customer(s). But, they usually wouldn’t disclose the name of the parent company in either case, if they do so, the prospect might by-pass the reseller and directly sign-up with the parent company. Moreover, resellers need to bear an overhead cost before reselling it.
This isn’t the case with an affiliate marketer, the host company would usually have a fixed commission slab predefined for the affiliates. If someone signs-up with or buys product(s) from the primary company, the affiliate would get a fixed commission for it.
But incase of channel partners, it’s a slightly different story. A company would usually sign-up for a channel partner program to expand their product offerings by providing a one-stop solution to customers. Such a company does not need to invest in the overheads, but rather earns a commission for the volume of customers referred to the parent company.
What are the advantages that Resellers have over Channel Partner and Affiliate programs?
In simple terms, there’s no restriction on the price at which they resell the services. If we consider an example of Web Hosting Reseller Programs, a reseller of WHUK can use custom name servers making it look like an independent hosting provider and not a reseller of ours.
Whereas, an affiliate or channel partner would earn commission based on predefined structure, as agreed upon mutually.
Why choose to be an Affiliate and not a channel partner or a reseller?
Well, Affiliates have an advantage over the others. They do not have to invest in the overhead costs, but just promote the products/services of the parent company using marketing techniques. Corporate meetings, customer acquisitions, technical support etc. isn’t something what’s expected from an affiliate. An affiliate can drive the entire activity on its own without the need of having a team to attract affiliate sign-ups.
Whereas being a reseller or a channel partner, you might have to interact with the prospects, provide post sales support, offer discounts and deals, trials etc. which might even require you to invest in additional human resource, pay their salaries and pass-over other benefits to them.
Advantages of being a Channel Partner
As the name suggests, a channel partner is as good as a representative of the parent company at the particular geographic location. In-a-way we can term it as a regional office wherein the customers and prospects can physically travel and visit the representatives. A channel partner may be required to sign-up contracts, handle legal obligations, offer consultation or even pay a visit to a customer if condition demands.
No such liabilities exist if you are an Affiliate.