When it comes to direct sales, the general rule of thumb is "more is better".  More customers, each buying more products and/or services generally produces more revenue and profit.  But resellers are not customers.  They do not consume product from a vendor.  They resell vendors products.  In essense, they are an extension of vendor sales teams.

When it comes to direct sales, organizations have a finite number of sales people.  Even though they may want to reach more customers and sell more to their existing customers, sales teams are limited. There is not an infinite supply of sellers in any organization.  Why?  If the objective is to sell as much as you can to as many people as you can, why not just keep addiing sales people?

The answer is probably obvious.  There are costs associated with sales.  The costs include hiring, training, managing, and administering sales people.  Typically, sales organizations add salespeople until the return expected from an incremental sales person is less than the incremental cost of the sales person.  At that point, one more sales person may produce more profit and revenue, but the cost of that one additional person is higher than the profit obtained.

The same is true with reseller partners.  A vendor has a real cost associated with having partners.  Those costs also include "hiring", training, managing and administering partners.  The costs of those tasks are probably not as clearly measured as anyone would like, but they do exist.  Then, there are all of the intangible costs, such as motivation, loyalty and passion.  Same as with a direct sales team, if there is too much competition, those intangible costs grow.

Organizations have knowingly or unknowlingly applied measures through strict budgeting processes to determine the ideal number of sales people to employ when selling direct.  Those same financial budgeting and rigorous analysis principles can and should be used to determine how many partners are ideal.  Sadly, it seems many vendors, though, simply open the door for anyone that has an interest.  Perhaps a little more discipline about quantifying the ideal number of partners would do many organizations alot of good!

William Vanderbilt

+1 630 343 6261

WVanderbilt@InnovativeLearningChannels.com