Distribution partnerships are strategic alliances formed between companies, typically technology or SaaS providers and distributors who specialize in delivering products or services to end customers.

These partnerships accelerate growth by providing companies access to new customer markets. Distribution partnerships essentially provide an outsourced sales team to your channel ecosystem.

There are two types of distribution partnerships, direct and indirect:

• Direct distribution: the partner acts as an extension of the company's sales team, selling directly to end customers.
• Indirect distribution: the partner acts as a middleman, selling the software to resellers who then market and sell it to end users.

Both models offer unique benefits. Direct distribution gives the company more control over the sales process and customer relationships, while indirect distribution provides access to a wider network of potential customers and specialized sales expertise.

The key to a successful distribution partnership is open communication, comprehensive onboarding and well-structured, transparent payment models. It's important to note that distribution partners are not merely sales channels. They play a significant role in customer retention and overall business growth by providing valuable market insights and customer feedback.

Related: What you need to know to drive distribution revenue.