Let's talk about how many companies use third party distribution channels to leverage their overall organizational resources to increase sales. In today's day and age, a lot of companies are using third party channels for reselling and supporting their products. Those channels include OEMs, system integrators, value added resellers, manufactures reps, agents, and distributors, among others. And they are used both domestically as well as internationally to push product out through multiple channels to their target markets. Yet many companies view this channel activity as being something that's free and easy to attain and don't necessarily focus the right resources on really developing and managing the right channels that would optimize their sales performance.

We see a lot of companies that set up and sign up third party resellers for their products, but gain very, very little actual sales performance from them. The reason for this is really twofold. First of all, without a very rigorous selection process, signing up a third party channel doesn't necessarily lead you to success, just like hiring a poor sales person doesn't necessarily mean you're going to sell more. Number two, once signed up, many companies make the mistake of thinking third party channels will sustain themselves on their own, with very little support.

So, we're going to talk a little bit about channel selection, and channel management to optimize sales performance in the next two discussions. The key here, though, is to remember that

third party channels can be a very powerful sales tool and a very powerful mechanism for getting your products to market faster and at lower fixed costs, that going through direct sales channels and have the potential to extend you into markets that you could not otherwise reach on your own, by virtue of the specialization and the location of different resellers in your target markets. So gaining market coverage through third party channels is a very compelling argument. The issue is, making sure that you're not just setting up channels that are full of empty promises and not actually capable of delivering sales for your company.

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