Estimated reading time: 4 minutes
So, you’ve weighed all your options and decided the best way to take your solutions to market is through a dealer network: A channel of resellers familiar with your market, with established relationships with key accounts, and teams of skilled technicians who can help users get the most value from your solution can help your business grow. However, it’s common for software companies to encounter challenges when building a dealer network and managing it long term.
It’s best to be proactive and address these issues before they stand in the way of channel success.
Commitment
One of the biggest challenges software development companies face is recruiting top resellers and getting them to promote your solution. Resellers often have one or two solutions that they have invested time to become certified in – and lead with when they talk to a new prospect. If those solutions compete with yours, it will be difficult to convince a successful reseller to make a change.
Also, as more business processes are digitalized, businesses are building bigger tech stacks, and resellers’ portfolios are filled with value-added and complementary solutions to the core systems they sell. Suggesting one more may just come across as noise to a reseller who has trouble keeping up with the vendor partnerships they’ve already established. 
To overcome the challenge of recruiting qualified resellers, software companies need to find ways to rise above the noise, capture resellers’ attention and give them strong reasons to commit. Like pursuing a key customer account, choose your target and research your prospective reseller’s company. Find out which partnerships they currently have and be prepared to answer questions about how your solution will help them gain more traction in their market and make more margin. Additionally, settle in advance whether you will provide leads (preferred) or count on the dealer to prospect. Then, with the right approach, you can open a discussion that results in a mutually beneficial partnership.
Conflict
Another challenge is avoiding conflict, which can be particularly difficult to avoid if you sell directly to end users before establishing your reseller network. Channel conflict can also occur if your resellers work independently and find themselves in competition for the same accounts.
The first step to managing channel conflict is to establish clear rules, preferably before your first reseller approaches a prospect, about which businesses are fair game. Rules communicated in advance will prevent resellers from spending time on deals they won’t or can’t close.
Setting prices can also help minimize conflict – for example, one reseller or your internal sales team won’t beat another reseller because they offer lower prices. You can also consider deal registration and giving resellers specific geographic territories to help minimize conflict.
Culture
On paper, a dealer may be an excellent fit for your channel, but your expectations don’t line up when you meet. For example, the dealer may see the potential to sell your software but doesn’t seem willing to conform to your program, invest time in certification, or the rules of prospect engagement you’ve established. Or your gut tells you that the dealer is someone that you’d prefer not to work with – or even socialize with. 
As difficult as it may seem to pass on a partnership when building your channel, the best course is only to partner with dealers with the skills and knowledge required to sell your solution but who are also a cultural fit with your organization.
Co-branding
Once you turn dealers loose on your market, it can be difficult to maintain a consistent brand image. Dealers may have their own interpretation of what your brand stands for – or attempt to conform your products to their own brand without white labeling.
Educate your dealers on your brand, share your vision and messaging, and provide them with co-branded materials that accurately include your logo, colors, and other branding elements to avoid confusion among your customers and prospects.
Communication
It’s not unusual for a software company to underestimate the time and resources it takes to manage a dealer network. Dealers can have questions at any hour of the day, and they need training and may require marketing and sales support.
Establish ways to provide your dealer network with the information and resources they need. Use all avenues at your disposal, such as an online portal to access a knowledge base and resources, 24/7 technical support, and dedicated channel reps they can call when they need to connect.
It may also be beneficial to have periodic reviews with your dealers to give them a chance to ask questions and share feedback on your channel program. They may even share their perspective on solution upgrades, in-demand features, or ways to innovate.
Complacency
Finally, the Software as a Service (SaaS) model allows your dealers to build recurring revenue streams. However, they may become content to service existing accounts at some point rather than pursue new business. When your goal is growth, dealer complacency is one of the biggest hurdles you can encounter.
It’s unrealistic to expect dealers to be accountable to sales quotas like you can with an internal sales team. Instead, a better strategy is to understand your reseller’s goals and set expectations that are reasonable for both of you.
You’ve invested time and resources into the partnership, and a segment of your users have relationships with the dealer. Do what you can to continue a beneficial partnership!
