A traditional indirect sales model allows businesses to scale faster, extend market reach, and grow revenue without relying solely on direct sales. This is a commercial go-to-market choice, not an industry-specific one.
By selling through channel partners such as distributors, resellers, and other third parties, organisations can access new markets and customers more efficiently.
However, indirect sales models introduce a critical challenge: partners choose what to sell. In competitive sales channels, products and services that receive focus, engagement, and advocacy from partners outperform those that do not. This is why your indirect sales model needs incentives – not as a tactical add‑on, but as a core part of your channel strategy.
What Is an Indirect Sales Model?
An indirect sales model is a strategic approach to selling where a business goes to market through third parties, rather than selling directly to customers itself. Instead of owning the sales process end-to‑end, the vendor relies on partners to promote, sell, and deliver its products or services.
Traditional Partner Types
- Managed Service Providers (MSPs) – providing ongoing management, monitoring, and service delivery, often blending resale, integration, and advisory roles. Such as Andromeda, Rackspace Technology and Claranet
- Distributors – providing logistics, credit, aggregation, and downstream enablement, often alongside pre‑sales support and ecosystem orchestration. Such as Ingram Micro, Westcon and Cencora
- Resellers – selling directly to customers and frequently layering on services such as installation, configuration, or support. Such as Insight Enterprise, Pharmint and Sysco
- Value‑Added Resellers (VARs) – extending and integrating products through implementation, consulting, or customisation. Such as CDW, Softcat and Computacenter
- Systems Integrators (SIs) – delivering complex, multi‑vendor solutions that combine software, hardware, services, and custom development. Such as Capgemini and Cognizant
- Independent Software Vendors (ISVs) and SaaS Innovators – On-prem and cloud‑native software creators whose products extend, integrate with, or enhance broader solutions or partner‑led offerings. Examples include Notion, JumpCloud, and Zapier.
- Retail & eCommerce partners – driving high‑volume sales to end customers across consumer and prosumer segments. Such as Amazon or PCW Currys
Across industries, many partners now operate in multiple of these roles simultaneously, combining resale with services, software with integration, or distribution with advisory.
Together, this blended partner ecosystem forms the indirect sales channel that enables vendors to scale reach, influence, and revenue without expanding their own direct sales team.
In contrast, a direct sales model is where a business sells directly to customers without intermediaries. The vendor owns the entire sales process – from generating demand through to closing the sale and managing the customer relationship.
Modern Channels Are More Complex Than Traditional Partner Labels
In reality, modern partner ecosystems no longer fit neatly into single, static categories. While traditional partner types are still useful as a foundation, most partners today span multiple roles simultaneously, often shifting between them depending on the opportunity, customer, or platform.
Omdia’s recent analysis highlights the rise of new partner types and blended partner roles, accelerated by cloud adoption, AI-enabled services, and digital marketplaces. Partners that once aligned cleanly to a single model now operate across several business models simultaneously. A traditional MSP, for example, may also act as an ISV through an in‑house SaaS offering, transact via hyperscaler marketplaces, deliver specialist cybersecurity services, and co‑sell alongside cloud providers; all within the same fiscal year.
This evolution has critical implications for channel strategy. If partners no longer behave as a single “type,” incentive design, engagement models, and enablement strategies must reflect how partners actually generate value, not how they are categorised on paper. Treating modern partners as one-dimensional risks missed revenue, disengagement, and misaligned incentives, particularly in ecosystems where influence, services, and co-selling now matter as much as transaction volume.
Indirect Sales Model vs Indirect Sales Channel
These two terms are often used interchangeably, but they describe different things.
The indirect sales model is the strategy.
The indirect sales channel is how that strategy is executed.
Indirect Sales Model (the approach)
This approach defines how a business goes to market overall. It is a strategic choice that determines:
- How sales are generated
- Who owns customer relationships
- How influence is applied instead of control
- Where incentives are required to guide behaviour
In short, the model defines how you sell and sits at the strategy level.
Indirect Sales Channel (the route)
An indirect sales channel refers to the specific route used to sell.
It describes who is involved in the sale and how the product reaches the customer – for example, through distributors, resellers, retailers, MSPs, or other channel partners.
In short, the channel defines where sales happen and sits at the execution level.
Why the Difference Matters
Most vendors operate one indirect sales model, but multiple indirect sales channels.
That distinction is exactly why incentives are needed. Incentives are designed at the model level to support overall strategy, but they are delivered through channels to influence partner behaviour, focus, and prioritisation.
What Do We Mean by “Vendors”?
A vendor is any business that relies on third parties to sell, promote, or distribute its products or services, rather than selling exclusively through direct sales.
This includes:
- Manufacturers selling through distributors and resellers. Such as Bosch, Honeywell, Zebra and 3M
- Consumer goods brands working with wholesalers and retailers. Such as Unilever, Remmington and Coca-cola
- Software and SaaS companies using channel partners and MSPs. Such as Microsoft and Buying Station
- Hardware vendors selling through distribution. Such as Zebra, Lenovo & Panasonic
- Industrial, energy, automotive, or healthcare suppliers with multi‑tier channels. Such as Siemens, Medtronic and Continental
If your business depends on someone else taking your product to market, you are operating an indirect sales model – and the same incentive principles apply.
Why Indirect Sales Channels Need Incentives
In indirect selling, vendors are competing for attention inside their partners’ sales motions. Most partners represent multiple brands within the same market or industry. Without incentives, your product risks becoming one option among many.
Incentives give partners a reason to act
A well-designed channel incentive program encourages partners to prioritise your product, invest time in enablement, and actively promote your offering to customers. Incentives create alignment between your business objectives and partner behaviour.
This is the foundation of an effective indirect sales channel strategy.
What Is a Channel Incentive Program?
A channel incentive is a structured reward designed to motivate partners to perform specific actions that support your sales and revenue goals. A channel incentive program is not commission, and it is not an employee loyalty program.
Instead, incentive programs are designed to influence behaviour across the channel, such as:
- Deal registration
- Product training and certification
- Pipeline acceleration
- Campaign execution
- Product adoption
When incentives are tied to behaviour, not just outcomes, they strengthen engagement and improve long-term sales performance.
Why Your Indirect Sales Model Needs Incentives
To Earn Focus in Crowded Sales Channels
Sales channels are competitive environments. Channel partners are constantly deciding which products to promote, which vendors to recommend, and where to invest their time.
Incentives help your business stand out by giving partners a clear, tangible benefit for choosing you. Without incentives, partners default to familiarity, margin, or habit – not strategy.
To Influence Behaviour Across the Sales Process
Traditional sales incentives often reward only closed revenue. In indirect sales, that is too late.
Effective indirect sales incentives influence earlier behaviours, including:
- Training completion
- Opportunity qualification
- Sales velocity
- Correct product positioning
By shaping behaviour throughout the sales process, incentive structures improve conversion rates and overall revenue impact.
To Improve Partner Engagement and Loyalty
Low engagement is a common issue in channel ecosystems. Incentives improve partner engagement by giving partners a reason to actively participate rather than passively coexist.
Consistent incentive programs build:
- Engagement and loyalty
- Strong relationships
- Trust and communication
Over time, incentives become part of how partners choose the right partners to invest in.
To Support Distributors and Resellers at Scale
Distributors and resellers play different roles within the channel. A flexible incentive program allows you to support multiple types of channel partners without running fragmented initiatives.
Incentives help distributors:
- Push priority products
- Support downstream partners
- Reinforce your brand reputation
They help resellers:
- Focus on selling your product
- Engage customers earlier
- Improve sales outcomes
To Drive Measurable Revenue Growth
A strong channel incentive program introduces structure and visibility into indirect sales. Participation data, engagement metrics, and performance insights allow businesses to connect incentives directly to revenue.
This enables:
- Smarter optimisation
- Better sales strategy decisions
- Stronger justification for incentive investment
Types of Channel Incentives That Work in Indirect Sales
There are many types of channel incentives, but the most effective programs align rewards with desired behaviours.
Common examples include:
- Financial incentives for deal registration or acceleration
- Rewards for training and certification
- Loyalty programs that encourage repeat engagement
- Campaign-based incentive programs tied to market objectives
The right incentives reinforce behaviour, not just results.
Benefits of Channel Incentives for Indirect Sales
The benefits of channel incentives extend beyond short-term sales wins. When executed correctly, they deliver:
- Improved engagement and loyalty
- Increased brand awareness
- Stronger customer relationships
- Better partner communication
- More effective channel programs
These benefits compound over time, supporting long-term business success.
When Incentives Are Not the Right Solution
Incentives are not a fix for every channel challenge. They are less effective if:
- Your product is not competitive
- Pricing or margin issues remain unresolved
- Channel conflict undermines trust
- There is no clear incentive program strategy
Incentives amplify good practices – they do not replace them.
Best Practices for Indirect Sales Incentive Programs
To maximise impact:
- Define clear objectives
- Keep incentive programs simple
- Communicate consistently
- Measure engagement and participation
- Optimise programs regularly
These practices ensure incentives strengthen relationships rather than dilute them.
Where Incentives Become Growth Infrastructure
Indirect sales run on influence, not control – and incentives are how that influence is applied at scale. But without structure, incentives quickly become inconsistent, hard to manage, and difficult to measure.
An incentive software platform turns incentives from a tactical lever into a strategic capability. It gives you the control, visibility, and automation needed to align partner behaviour to business goals, prove impact, and scale performance across the channel.
If incentives drive growth, an incentive platform is what makes that growth predictable, repeatable and sustainable.
Glossary of Terms
Vendor
A vendor is a company that creates and sells products or services through indirect sales channels rather than selling directly to customers.
Channel Partners
Third-party organisations that sell, promote, implement, or support a vendor’s products or services.
Distributors
Organisations that sit between vendors and resellers, managing logistics, financing, and partner enablement.
Resellers
Partners that sell products directly to customers, often adding services such as configuration or support.
Retailers
Partners that sell products directly to end customers, typically in high-volume‑ or consumer markets.
Value-Added Resellers (VARs)
Resellers that enhance products with additional services such as integration or customisation.
Systems Integrators (SIs)
Partners that design and implement complex multi‑vendor solutions for customers.
ISVs (Independent Software Vendors)
Companies that develop and sell software products, often distributed through indirect sales channels.
MSPs (Managed Service Providers)
Partners that deliver ongoing managed IT services and act as trusted advisors to customers.
Referral Partners
Partners that introduce leads or opportunities but do not close the sale themselves.
Alliance Partners
Strategic partners that collaborate on joint solutions, integrations, or goto‑-market‑ initiatives.
