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Ecosystem Leaders

Episode 84

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November 6, 2019

#84 Marc Palombo: Building a Channel Partner Ecosystem? Here’s Everything You Need to Know:

Marc has worked with channels for over 25 years. Now, he’s the Reseller Program Manager at AvidXchange, a payment solution that's now working with ...

Marc has worked with channels for over 25 years. Now, he’s the Reseller Program Manager at AvidXchange, a payment solution that's now working with over 540,000 B2B suppliers, which, according to Marc, makes it the largest B2B supplier network.

This guy knows about alliances.

When Marc first came onboard at AvidX, they were a direct seller only. It took some convincing with upper management, but after 18 months, Marc implemented a reseller program that has been wildly successful.

He came on our Alliance Aces podcast to share what he’s learned from his experience at Avid and his 25 years in working with channel partners.

(If you’re considering a reseller/channel partner program, this is the episode for you!)

Finding the best mix of direct selling vs. resellers can be a challenge

This is always a challenge — what selling strategy is best for the company? Should you stick with a direct selling methodology, or begin to widen your ecosystem to include channel partners?

The answer depends on a variety of factors, but here are a couple things to keep in mind, Marc said: 

First, generally, there are 2 different types of partner programs:

1) Revenue share agreement

“Our list price is X, and I'm going to pay you, our partner, a percentage of X.”

2) Cost-plus wholesale model

“Our suggested retail price is X, and we are going to sell it to you for Y. You can resell our solution at Y plus whatever you want.” 

Often, there’s more creatively allowed inside of wholesale models

The more creative resellers will often use the cost-plus model to bundle a solution into a package, often a subscription, with other solutions. Then, they can charge customers a monthly subscription price for the package.

There’s a control tradeoff when you engage with channel alliances

If you decide to work with channel partners, there’s an inherent level of trust needed. We talk about this pretty frequently on our show, because nearly every guest mentions it.

Clearly, as the alliance manager, it can be somewhat intimidating when you advocate for a channel alliance; you are abdicating control over part of your revenue, yet, you can’t directly control that revenue. Likely, you will be held accountable internally for whether that revenue goal is achieved through your channel alliance.

Marc says you combat this intimidating feeling of losing control by treating channel alliances as extensions of your sales team — you offer much of the same sales enablement as you would to your internal direct seller. Lastly, keep in mind that you aren't trying to compete with your direct sales team.

You need upper-management buy-in from your alliance partner

Treat channel alliances the same way you'd treat selling a solution to a B2B customer — ensure you obtain the appropriate upper-management buy-in. Without the sign-off from the necessary upper management, likely the VP of sales, it's going to be very difficult to ensure your channel partner is really all-in on selling your product. 

Actively seek out alliances where your solution is an easy add-on

One unique strategy Marc has employed is to look for channel partners who are already selling other products that integrate with Avid’s payment solution. Marc engages these channel partners with an easy pitch: “You already sell X other solutions, and ours is an easy and valuable add-on for your customers. If you add our solution to the package you’re selling, you can increase your margins.” 

It's an easy sell, and it's a win-win-win (as all channel partnership should be!). The end-clients enjoy the payment solution that Avid offers, which integrates seamlessly with their tech stack. The channel partners win because they increase their bottom line with minimal effort, and, of course, it's a win for Avid, because they're leveraging the power of channel partners who have pre-existing client relationships. 

Whether a channel partnership is right for you, we hope Marc’s advice gives you a launching point.

Listen to the podcast here.

To hear this episode, and many more like it, you can subscribe to the Ecosystem Aces Podcast, or visit our dedicated Alliance Aces page. 

To contact the host, Chip Rodgers, with topic ideas, suggest a guest, or join the conversation about alliances, he can be reached by: