• United States
larry chaffin
CEO and Chairman of Pluto Cloud Services

Vendor Inside Sales/Direct Sales vs. Partner/Reseller, who is getting the shaft?

Dec 01, 20113 mins
Cisco SystemsData CenterEnterprise Applications

Vendors taking more customers direct to make more money

Over the last two years I have heard more and more about vendors who are poaching into partner sales via inside sales teams or direct sales. Most vendors we know have a partner network and say they are 100% partner sales, but are they really? Many have inside sales teams of which they say are driving leads and sales for the partners, but that is not always the case. Many times they are trying to sell the product to customers so they can make more profit and cut out the partner on the commission. I see it from many vendors as do my counterparts at other companies.

The problem most are running into is telling the vendor about a customer and them saying “that’s already a registered deal or we are already working with them”. Most of the time you don’t know but in the end it’s the vendors call. I have seen inside sales lie to partners about customer deals or leads just so they can take them direct to the inside sales team. Don’t be fooled the inside sales teams are there to make money for them, not the partners. They are also getting more direct and calling into an existing customer base for renewals and upgrades. Should that be allowed? Should the vendor step up and protect the partners? Few are.

Another issue which was discussed last night with me by two other companies was the direct sales. Let’s face it; big deals are hard to come by these days. But more partners are hearing from vendors there is an executive relationship and it will be a direct sale. Is it a lie from the vendor or the truth? No one knows but vendors are less likely to give up large deals to partners and will find any reason to keep it direct. They are less likely to bring partners into any deal now.

How many times have you seen the vendor going around a partner to meet with a customer on a big deal? I have heard about it many times from my counterparts at other resellers. Can you really trust the local sales team to look out for you or are they looking out for themselves? 

It is something that I predicted two years ago, vendors will do away with partners at some point and will have all direct sales. They make more money and can just use partners for installs and support. Many resellers agree and are seeing this now. So will there be partner networks in ten years? I don’t think so and we should all get used to it. Vendors will pull everything back and will take all sales direct, like they are doing now.

I think you have a partnerchannel network and should use it, or you have only direct sales. You cannot have both and keep partners happy and you cannot have inside sales calling into partner accounts. But the worst part is when they lie to partners to make money. Why even have partners?

The financial mess of the last few years has changed the way vendors look and think of making money.