Notes for owners · Channel and customer growth
How to design a channel partner programme
Decide what the partner must do, what they earn for it, and what they get from you in return. Write the tiers, margins, territory and support down first.
The GullySales team · Updated 15 Sept 2026 · 6 min read
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A channel partner programme is three written answers. What the partner is expected to do, what they earn for doing it, and what they receive from you to make it possible. Get those three on two pages, with tiers, territory, margin and support defined. Appointing partners then becomes a repeatable exercise, not a fresh negotiation nobody remembers two years later. Most programmes in Indian SMEs fail not because the margin was wrong but because the expectations were never written down.
Decide what the channel is actually for
Before designing anything, be clear about the job. Partners are usually appointed for one of four reasons, and the design differs for each.
Reach, where you need feet in towns you cannot cover. Stock, where the buyer expects material available locally and someone has to hold it. Service, where installation, commissioning and after-sales require a local presence. Access, where the partner already sells to the buyer you want and can carry you in.
A programme designed for reach and then judged on stock holding produces angry reviews on both sides. Write the reason down first.
The parts of a programme
Partner roles. Dealer, distributor, stockist, system integrator, referral partner. Each has a different function, margin and obligation. Mixing them into one agreement causes most channel conflict.
Territory. Defined by district, pin code or named account rather than by "south Bengaluru". Say whether it is exclusive, and if it is, say what performance keeps it exclusive.
Commercial terms. Base margin, volume slabs, payment terms, credit limit, freight responsibility, GST handling, return and warranty process, and who bears the cost of a replacement.
Expectations. Minimum annual purchase, stock holding, number of trained staff, display or demonstration unit, enquiry reporting, and participation in reviews.
Support. Price list and catalogue, product training and certification, leads passed from your marketing, co-branded material, demonstration equipment, technical help on a call, and market development funds where they apply.
Governance. Who at your end owns the relationship, how often you review, how enquiries are registered to prevent two partners chasing one buyer, and how the agreement ends.
A simple three-tier structure
| Registered | Authorised | Premier | |
|---|---|---|---|
| What they do | Sell on enquiry, no stock | Stock the fast-moving range, one trained person | Stock the full range, service team, demonstration unit |
| Annual commitment | None | A stated minimum | A higher minimum, agreed each year |
| Base margin | Lowest | Middle | Highest |
| Additional earning | None | Volume slab | Volume slab plus a quarterly performance bonus |
| Territory | Non-exclusive | Non-exclusive, first right on enquiries | Exclusive for the district while targets are met |
| Leads from you | On request | Passed in their area | Passed first, with follow-up tracked |
| Support | Price list, catalogue | Product training, co-branded material | Training, demonstration unit, market development support, quarterly review |
| Review | Annual | Quarterly | Monthly numbers, quarterly meeting |
Three tiers is enough. Five tiers produces a document nobody in the field can explain to a shop owner.
The conflict rules you need on day one
Channel conflict is predictable, so decide in advance. Which accounts are yours to sell direct, named in the agreement rather than decided later. What happens when an end customer in Partner A's district orders from Partner B, including whether a fee is shared. How an enquiry generated by your marketing is allocated, with a registration rule and a timestamp. What your online price is, because an e-commerce listing below the dealer's price destroys trust faster than anything else.
The registration rule matters most. A first-come record with a date settles arguments that otherwise consume your sales head's week.
A worked example
For example, imagine a water treatment equipment manufacturer in Bengaluru selling softeners, reverse osmosis plants and effluent treatment systems. The details and figures below are illustrative. Domestic and small commercial units sell through dealers; industrial effluent plants are sold direct because they need engineering.
The programme that works splits accordingly. Dealers in Hubballi, Belagavi, Mysuru, Mangaluru and Davanagere carry the standard range with a defined margin, hold a demonstration softener, and get one trained technician certified by the company. Projects above a stated capacity are named as direct business in every agreement. A referral fee goes to the dealer who introduced the enquiry, for example an illustrative two per cent of order value. That single clause prevents the argument that otherwise ends the relationship in the second year, because the dealer knows what they get instead of losing the deal entirely.
What to measure per partner
Six numbers, monthly, sent to the partner as well as read internally: enquiries registered, quotations given, orders placed, value, stock held, and open service issues. Add one qualitative note from whoever visited or called.
Partners behave differently when they can see their own numbers next to the previous quarter. A programme with margins and no reporting becomes a discount scheme.
What to do next
Write your current terms out as they actually are, partner by partner, on one sheet. Most owners find three or four different margin structures they had forgotten agreeing to, and two partners in overlapping territories. That sheet is the starting point for a real programme. We look at channel structure alongside the direct enquiry system, because in most businesses the two are quietly competing for the same buyers.
