What Are Sales Channels? (and How to Pick the Best Ones)

By: Steven Clifford
October 8, 2024 | 10 min read

According to the Salesforce State of Sales report, organizations use an average of 10 channels to sell to customers. That’s a lot of channels for sales teams to manage in an ever-changing landscape of business.

Sales channels stand as the conduits that connect companies to their customers. Think of them as the highways of commerce, guiding goods from production lines to the hands of consumers. Brick-and-mortar stores, dynamic e-commerce platforms, and direct sales approaches like social media marketing play a crucial role in driving business growth.

Read on to learn how to leverage sales channels to help you reach more customers and steer business success.

• What are sales channels?
• Types of sales channels
• Benefits of having a sales channel strategy
• Choosing the right sales channels for your business
• What to look for in software to manage sales channels

Sales channels are all the places you sell to your customers. The channels can be direct, like e-commerce sites and retail stores, or indirect, like resellers and marketplaces. Businesses may rely on a single sales channel or multiple channels.

There are three main sales channel categories: direct, indirect, and online. Each channel type has its own sales approach and can be specific to the industry, target customers, and market. To illustrate the idea, let’s look at how High Volume Sound, a fictitious maker of high-end speakers, uses each type of sales channel.

A direct sales channel is where a customer engages with a salesperson and purchases a product or service directly from their business. Think of direct sales as person-to-person without any intermediary (such as an affiliate or wholesaler). Examples of direct sales include a customer purchasing from a company’s brick-and-mortar retail store or a customer buying a product from a direct seller during a sales meeting.

Example: High Volume Sound has a sales team, and reps sell the speakers directly to their target customers at music studios and dance clubs by conducting sales calls, sales presentations, and product demonstrations.

An indirect sales channel is when a business sells its product or service through a third party, such as a partner, affiliate, wholesaler, or reseller. A benefit of indirect sales is it allows a business to efficiently scale by working with third parties that are already established in markets and have an existing customer base.

Partner selling is a popular indirect sales channel for many businesses. According to the Salesforce State of Sales report, partner selling is widespread with 89% of sales teams currently using partner sales. 84% of sales professionals say partner selling has a bigger impact on revenue than a year ago.

Example: High Volume Sound wants to reach more customers by expanding into the European region. It hires a partner company based in Europe that can leverage its strong customer relationships to sell the speakers.

An online sales channel is exactly what it sounds like — a business sells its product or service to customers via online platforms. This might be an online store, online marketplace, social media platform, or mobile app.

Online channels provide a wider group of customers access to your products. They also help meet changing customer preferences for online interactions. According to Salesforce State of the Connected Customer report, 57% of buyers prefer to engage with companies through digital channels. Sales deals are being closed completely virtually on channels for online chat/support (87%), online portals (86%), and mobile apps (85%).

Example: High Volume Sound wants to reach a wider global audience of customers. It launches a company online store to sell speakers to its customers.

Customers often interact with organizations in multiple ways. Using a sales channel strategy, businesses can effectively reach them by creating opportunities in the spaces that their customers participate in. You need the right mix of channels to meet your customers where they are and engage with them to deliver exceptional experiences.

These are some of the benefits of having a sales channel strategy:

• Reach more customers: Connect with new customers by spreading your sales efforts across several channels. Look at the number of customers for each channel and ensure you have the sellers and adequate setup to offer coverage to them, such as a partner seller that can cover a specific region.
• Evaluate channel efficiency: You’ll see which channels are effectively acquiring more customers and which ones are decreasing profit margins. Once you dig into these metics, you’ll know where to put your efforts and investment to support the high-performing channels.
• Ability to assign talent to a channel based on strength: A strategy allows you to align the right sales professional with the right channel. In the High Volume Sound example, it may be more advantageous to work with a channel partner in an expanding market or have direct sellers to show a product’s value with a sales demo. The potential result of matching a seller’s competency with the channel is higher productivity and lower operating costs.

To figure out which channels are best for your organization, start by looking at the business financial goals you want to achieve. Then, back into these goals by analyzing the effectiveness of each channel relative to your ideal customer profile. Consider the channels your customers are buying on, the reach of those channels, and the cost of maintaining them.

Here are some factors to consider when choosing your sales channels:

Analyze the costs to set up and maintain a channel versus the profit margin you expect from the channel. For example, the costs for hiring team members, travel expenses, or website maintenance.

Companies will often make certain products only available on some channels. Complex products, like computer software or manufacturing equipment, often require direct sales to effectively explain and demonstrate their capabilities to customers. Whereas simpler products, such as a replacement part for equipment, can be sold through an online store. The same thinking can be applied to the cost of the product. Customers may prefer to purchase an expensive product from a direct seller rather than online.

Smaller companies often opt for simpler channels, like e-commerce stores, to start out. These online channels usually don’t require a big staff to manage. But as sales take off, use your CRM to see trends in when and where your customers are spending. For example, if you see a gap that could be filled with a dedicated sales team, that’s a new direct channel to consider.

Assess where your customers are based. For example, if they are concentrated in one region, dividing the area into territories for direct sales could be beneficial. If your customer base is spread out globally, then online sales might be a more efficient approach.

Examine which channels your competitors are using to connect with buyers. For example, if your competitor is having success with an online store, then you might consider adding this channel to your strategy.

For example, let’s say High Volume Sound wants to scale the company by increasing its financial goal to an average revenue of $5,000 per deal by targeting more customers in the European market. High Volume Sound decides to use an indirect channel versus a direct seller because they want to keep their channel costs in check. It hires a partner with existing customer relationships in the market and uses a partner revenue model that allows it to achieve its financial goal while reaching more customers and increasing market penetration.

Sales organizations leverage technology and tools to automate their processes and help sales teams be more efficient and productive. Tools provide your team with better visibility into sales channels through dashboards that display insights on sales pipelines and forecasts.

For example, each of your channels needs a pricing strategy. By using revenue management software, you can leverage data and analytics to plan, set, and optimize the pricing across sales channels. You can look at customer spending habits for each channel to determine where, when, and how customers buy your products and use the data to adjust pricing to maximize your profit.

Once you have a channel strategy, use these best practices to optimize the sales outcomes:

Regularly evaluate the performance of each of your channels and use sales enablement to address areas for improvement. Sales enablement uses content, coaching, and training to onboard new sellers and improve the skills of your existing sales team. It helps ensure consistency and a unified sales message across multiple channels. The Salesforce State of Sales report found that three in four sales reps say their company’s enablement programs prepare them to meet quota. They rate high satisfaction for the availability of support materials, product-specific training, and one-on-one coaching.

You can start with just one channel and develop more over time. This approach lets you look at each channel’s pros and cons before adding more as your business evolves with new sellers or products. For instance, you might begin with a direct sales team. Then, after noticing customer demand for wholesale buying options, you can add that channel.

These are some beneficial technologies that help with selling through sales channels:

A CRM consolidates the customer and prospect data from all of your channels in one place, and tracks the progress of sales activities across the sales cycle and syncs real-time updates from every sales channel. Seeing a customer’s buying history can be especially helpful, allowing you to determine if they prefer a direct, indirect, or online channel.

Use generative AI to draft personalized sales or follow-up emails to customers by linking to your CRM. Apply predictive AI for forecasting any channel and identify potential issues in your sales pipeline and sales process. And, you can use AI for training as well. Create call collections of successful sales conversations from top performers with AI-powered platforms like Sales Cloud and share them across your channel teams and when onboarding new sellers. Sales leaders can coach individual channel sellers with feedback in context by highlighting and commenting on relevant parts of their conversations.

Manage your entire indirect sales channels — such as partners, resellers, or wholesalers — from one platform. You’ll have visibility into partner performance and how they are tracking toward sales goals. Eliminate the back-and-forth with partners by giving them access to self-service features to find knowledge articles, co-branded marketing assets, and pre-built templates. Look for software with the configure, price, and quote (CPQ) functionality so partners can provide accurate quotes for your products and services. Save time by embedding products, pricing, and rules in a policy-aligned partner portal with approval workflows and discount controls.

Territory sales managers and field reps can lessen the tedious administrative tasks of territory management with software that automatically balances territories and saves you several hours in scenario planning and testing. Easily create map-based territory plans and assess the coverage and performance gaps at channel levels.

This software streamlines intricate commission workflows by building the incentive compensation plans for each channel and automating commission calculations. It helps to eliminate manual processes that are prone to human error. You’ll have the flexibility to quickly adjust compensation plans for changes in each sales channel’s structure.

Whether it’s direct, indirect, online, or some mix of them all, using the right types of channels are key to discovering new pathways to sell your business’s products and services. With an efficient sales channel strategy, you’ll be on your way to acquiring new customers, expanding your reach into new markets, and boosting sales revenue.