Partners say their vendor relationships are profitable, yet only 13% earn most of their profit from vendor margins and incentives. New Channelnomics research explains the disconnect.
Ask partners whether their primary vendors are profitable for their businesses and nearly all — 95% — say yes. Ask them where their profits actually come from and the story changes. Only 13% earn most of their profit from the margins, commissions, and incentives their vendors provide.
That gap is the Channel Economics Paradox, and it's at the heart of a new report from Channelnomics, "Rebalancing the Economics of Vendor-Partner Relationships." The economic inequity between partners and their vendors is palpable. Most partners rely on their own services or third-party sources of revenue to drive adequate profitability — and even then, their profit potential is substantially less than that of their vendors.
Channel relationships are so out of balance that 75% of solution providers treat vendor product sales as a gateway to higher-margin opportunities rather than profit centers in their own right. And 45% rank lower partnership cost and complexity as their No. 1 motivator — ahead of margins, incentives, and market development funds.
Channelnomics digs deeper into the economic inequities in partner go-to-market relationships in "Rebalancing the Economics of Vendor-Partner Relationships," available exclusively to members of the Channelnomics IQ program.
