How to model channel sales correctly

    Written by HarmonyPSA on 2018-02-19 Last updated 2018-02-19 - 2 minute read

CRM, Order management and billing systems are generally designed for a direct sales model where the lead, opportunity, quote, order and invoice only involves two counterparties: a seller and a buyer. Simple.

But what happens if you sell via a reseller, or an agent who is on commission? What are the data modelling and contract implications? How do you track who is who, how do you model the end customer in a way that your service desk system understands this properly?

So, let’s dive into the detail around these two behaviour models to understand the control system needs as a guide to buying the right solution.

Model 1 – Full reseller

In our terminology, a full reseller is someone who distributes your product and provides 1st and 2nd line support to their own customers. They are your counterparty, however, they are not the licensees of your product.

To work correctly, this model needs the ability:

  • To call a counterparty a reseller
  • To separate the financial counterparty (aka the reseller) from the business counterparty (aka the end user) throughout the complete transaction cycle and in reporting
  • To model service tickets raised by the end customer against that counterparty record directly, not against the reseller
  • In the sales cycle to identify both parties and to model the attributes of the end customer where you would normally model the direct counterparty so reporting isn’t broken
  • To offer specific “via reseller” pricing and contract terms separated from your direct engagement terms. If you are using this model to go international, the ability to model these terms in the reseller’s currency
  • To do consolidated invoicing at the reseller level, while still clearly identifying each component grouped and subtotalled by end-customer to help explain and reconcile charges

Reseller modelling is not simple and trying to hack it into a single counterparty system is likely to make matters worse not better.

Model 2 – Commission agent

The lighter engagement model for extending your sales reach, or going international, is to use a company to sell on your behalf, but then take the customer onto your books directly. Here, the sales agent will charge a commission when they make a sale.

To work correctly, the model needs the ability to:

  • Separately register leads to the sales agent (so create a relationship between a lead/opportunity and a supplier) not your own sales team, and de-duplicate leads based on who logged it first
  • Enable sales agents to update pipeline reporting on your system directly
  • Model their sales commission as a cost of goods element tied to their company as a supplier record
  • Sell products that have CoG’s relationships built in so that the correct margin is displayed on any quote/order with a purchase row auto-generated in parallel
  • Issue the right PO to the sales commission agent once the business has closed to facilitate their invoicing you as a supplier
  • Handle consolidated supplier invoicing and match a single supplier invoice against multiple Purchase Orders

Also, not straightforward, functionality that is very had to find in PSA systems.

Not any longer. If you are struggling to model and tracking your channel business let us know, we have this functionality out of the box.

Read More

Managing channel sales
Developing a channel distribution model


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About the Author: Harmony Business Systems Ltd., a CloudBlue company, is the business behind HarmonyPSA, the most complete cloud professional services automation (PSA) software on the market. Purpose-built with functionality to simplify every need of MSPs and Professional Services Organisations, HarmonyPSA introduces a state-of-the-art PSA system built for today’s modern service provider. The platform empowers services organizations to scale recurring channel revenue and diminish operational complexity via its advanced product suite, which includes automated billing and reconciliation, an industry-leading customer support center and network operations center (NOC), real-time profitability analysis, and much more. HarmonyPSA is available globally. Follow HarmonyPSA on , LinkedIn or Website

Tags: Business


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