Building strong alliances and partnerships with both industry and local partners should be a high priority for any business that wants to rapidly expand its customer base, its products and services portfolio, and dramatically improve sales and profits. There are numerous benefits to selling with and through partners. Here are some of the more significant benefits:
- Receive generous commissions on products and services sales
- Gain access to leading products, services and business building tools
- Receive training and support from branded products and services companies
- Obtain free sales and marketing tools to help you identify new revenue sources
- Strengthen your brand through business relationships with high profile partners
- Expand your market reach without major investments in advertising and marketing
- Extend your value proposition by offering a broader array of products and services
For small business owners, identifying potential partners and cultivating those key relationships should be an integral part of your ongoing networking and business development activities. Formalize these discussions through one-on-one meetings with local business owners who have similar goals, and are open to partnering.
Another great way to start to identify potential partners that are a good match for your particular business situation is to evaluate your current customer-supplier relationships. Who are you doing business with today, and who is doing business with you? See if any synergy exists, and if so, start a dialogue.
Strategic partnerships, if properly developed, represent an indirect sales channel for your business, and provide you with access to potentially lucrative new markets, emerging products and services, and future profits. Listed below are some of the most common partnership designations to help you determine the “best fit” for your business.
- Affiliate. Most common form of partnership within the online business community (i.e. click through sales). The majority of affiliate partnerships require a formal agreement, and pay generous commissions up to 40%+.
- Referral. Many referral partnerships are informal or local “hand shake” agreements. One-time cash bonuses or commissions are paid on new sales at a lower rate that an affiliate partnership, and sales tend to be sporadic or event driven.
- Reseller. A reseller or VAR relationship is typical within the technology, software and services areas. Reseller agreements can be multi-tiered and offer commission rates up to 45%+ depending on the revenue commitment level.
- Joint Venture. JVs are generally complex “one-off” business relationships that enable two or more parties to share markets, intellectual property, assets, domain knowledge and profits, depending on the terms of the agreement.
- Affinity. Affinity partnerships are typically informal, local business relationships tied to a specific program or event. Potential affinity partners can include the local Chamber of Commerce, business or trade associations, clubs, networking groups, etc.
The goal of partnering should be to forge “win-win” business relationships that benefit both parties equally as a result of the agreement. For any small business, particularly one just starting up, it’s important to strike a balance between the diverse partnership opportunities available to you, and your direct selling activities. Effective partnerships will enable you to profitably grow your business, while offering more options and value to customers.
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