Indirect Sales Channel

The "indirect channel" is the umbrella term for every sales motion that doesn't run through a vendor's own employees. VARs, MSPs, distributors, SIs, referral partners, and affiliates are all part of the indirect channel. When B2B leaders talk about "the channel," they usually mean the indirect channel — direct sales is implied as a default.

Direct vs Indirect — The Core Trade-Off

Every revenue motion sits somewhere on this spectrum:

• Direct — Vendor employees sell to vendor customers. Vendor controls pricing, messaging, customer relationship. High cost per deal, high gross margin, slow geographic expansion.
• Indirect — Third parties sell to vendor customers. Vendor pays commission, margin, or services revenue. Lower cost per deal, lower gross margin, fast geographic and vertical expansion.

Most mature SaaS companies run a hybrid. The strategic question is the ratio: 80/20 direct, 50/50, 20/80? The answer depends on category dynamics, customer expectations, and product complexity.

Structural Implications of Going Indirect

Adding indirect sales changes more than the org chart:

• Sales — Channel account managers replace or supplement AEs. Compensation models include rebates, MDF, and partner-sourced credit.
• Marketing — Demand gen feeds both direct funnel and partner pipelines. Co-branded content, partner-portal MQLs, partner-specific campaigns.
• Product — Multi-tenant management, white-label options, deeper integrations with partner-side tooling become roadmap requirements.
• Pricing — Wholesale price lists, tier-based discounts, deal-registered margin protection.
• Finance — Commission accounting, rebate accruals, revenue recognition complexity all increase materially.
• Legal — Reseller agreements, deal registration policies, channel conflict resolution language.

When Indirect Makes Sense

An indirect channel is worth building when one or more conditions apply:

• Customer buying behavior favors trusted advisors — Your ICP buys software through MSPs, consultants, or vertical-specific resellers rather than direct.
• Implementation requires expertise you can't scale internally — Configuration, integration, or change management work that partners deliver more cost-effectively than your CS team.
• Geographic or vertical expansion needs would otherwise be slow — Partners already operate in territories or industries where you don't.
• Direct CAC is unsustainable for your average deal size — Sub-$10K ACV deals can't afford a full direct sales cycle but might support a partner motion.

When Direct Beats Indirect

• You're pre-product-market fit — Partners don't sell what they can't trust will retain customers. PMF must come first.
• Your product is fully self-serve — If a customer can sign up and succeed in minutes, partner intermediation creates friction without adding value.
• Your gross margins can't absorb partner economics — Some software pricing models leave no room for 20–40% partner margins.
• You need direct customer feedback to ship product — Indirect channels filter and slow customer signal.

The Hybrid Reality

Almost no SaaS company is purely direct or purely indirect. The interesting strategic question is segmentation: which customers should buy direct, which through which partner type, and how to prevent channel conflict at the boundary. Good answers come from segmenting by:

• Deal size — small deals go through partners, enterprise deals direct.
• Geography — North America direct, international through partners.
• Vertical — generic horizontal direct, regulated verticals through specialized partners.
• Customer segment — SMB through MSPs, mid-market through VARs, enterprise direct or SI-led.