So many companies sign up third party resellers and distributors and system integrators and OEMs without giving proper rigorous attention to the process that's required in order to define the selection criteria, find adequate channel partners, and actually go through a process of due diligence in order to screen them, select them, and bring them onboard. A well developed channel selection process, a reseller selection process, looks a lot like a very rigorous process for hiring and acquiring members of your senior management team or your key employees in sales and marketing. It starts by defining very clearly which markets you're after, which segments you want to reach, what types of customers you're trying to acquire, and then doing research and analysis to determine which companies are actually calling on and supplying goods and services to those customers day in and day out in your focused market.

Once you've defined those customers and those market segments that you're after, then looking at the different types of reseller organizations that are available for you to get your product to those customers becomes the next task. This step involves making sure that you understand exactly what sales and support structures required for your product in order to deliver it as a solution to the end customer. Some companies use manufacturer's reps that are just basically commissioned agents. Other companies use value added resellers, others used stocking distributors, and yet others use system integrators that actually build their products into complete turn key systems for their customers. So you're going to want to make sure that you do some analysis to figure out which kinds of reseller channels you need in order to most adequately provide your product to your customers in a solution that they're willing to buy, and then make a decision about that type of channel structure. Many companies use multiple types of resellers to reach different types of customers as well.

The next step in a channel selection process is acquiring potential candidates. This can be done by going to trade associations and looking at trade association directories for resellers, of which there are many, to actually get lists of potential resellers. Or it also can come from looking at who your competition is using or complementary products companies are using in order to get their products to market. But it certainly includes defining a list of potential candidates. You'll never want to select a reseller without having multiple options to compare against, just like you'd never hire a key sales person without having multiple options to compare against. So, acquiring lists, getting names, also getting referrals from your best customers is an excellent way to identify potential resellers. Who are they buying from? Who do they like to buy from? Who do they view as the most professional reseller vendors in your market? Those are easy questions to ask of some of your best customers and prospects to define who it is that you should be working with as your channel partner.

The next step is, of course, contacting those companies and using either referrals or through a direct mail process which is very easy to set up and do. Then, you establish the actual channel partner selection criteria that you're going to use in order to make sure that you understand what it is that you're looking for. After developing that selection criteria, you're going to want to develop a questionnaire or an interviewing guide, if you will, and process and steps to gather the information that you need from those channel partners in order to match that information against a selection criteria that you've established. Then, of course, from there, after you've gone through the due diligence process, gathered their performance history, understood their sales organization, looked at how much they're selling for each of their principal vendors and understood who their customers are and why they win against their competition, you're going to want to go into the process of actually negotiating an agreement.