"You need a channel strategy!" the advisors screamed. "Let partners sell your product for you! It's free leverage!"
So we built a Partner Program. We certified consultants. We gave them badges. We offered 20% commission.
We signed up 50 partners. Agencies, dev shops, consultants.
One year later, I looked at the data.
Leads sourced by partners: 0.
Deals closed by partners: 5. (All 5 were leads we found, where the partner just tagged along and asked for a commission).
It was 100% overhead for 0% incremental revenue. We killed the program. Here's why channel sales is a trap for early-stage companies.
Section 1: The "Free Sales Team" Fantasy
The logic is seductive. Agencies already talk to your customers. If you convince the agency to recommend you, you get access to all their clients.
If you sign up 100 agencies, and each brings 1 deal a month, that's 100 deals! Without hiring a sales team!
The Reality:
Agencies don't care about your product. They care about their billable hours.
They will strictly recommend whatever is (a) easiest to implement, (b) they already know, or (c) the client specifically asks for.
They will not "sell" your product. They are order takers. If the client doesn't ask for it, the agency won't mention it.
The Commission Fallacy:
"But we offered 20% commission!"
Agency margins are on services, not software resell. A $10k software deal gets them $2k commission. A services project is $50k.
They aren't going to risk their trusted advisor status with a client to pitch a new software product just to make $2k.
Section 2: The "Tag Along" Scam
The only time partners "brought" us deals was when the deal was already happening.
Scenario:
- Our sales rep works a lead for 2 months.
- The lead decides to buy.
- The lead tells their agency "Hey, we're buying XQA."
- The agency emails us: "Hey, we're working with Client X. This is our deal. Register it for commission."
We were paying 20% margins to partners who did zero work to generate or close the lead.
It was a tax, not a growth channel.
Section 3: Overhead Is Not Zero
The advisors said channel sales was "leverage." It felt like a burden.
Partners need attention. Trainings. Assets. Portals. "Partner Managers."
We hired a full-time Channel Manager ($150k). We spent engineering time on a Partner Portal ($50k). We spent marketing time on Partner One-Pagers.
Total cost: ~$250k/year.
Total incremental revenue: $0.
We were lighting money on fire to keep people happy who weren't bringing us business.
Section 4: When Channel Sales Actually Works
Channel sales isn't always a scam. It works for:
1. Massive Commodities (Microsoft/AWS):
If everyone needs cloud hosting, partners compete to service that demand. They don't create demand; they service it.
2. Complex Implementation Products (Salesforce/SAP):
If buying your software requires $100k of consulting work to install, agencies will love you. They sell the software to get the services revenue.
But we were a modern SaaS. Easy to install. Low services revenue. Agencies had no incentive to sell us.
Conclusion
For most early-stage B2B SaaS, the Partner Program is a distraction. You need to learn how to sell your product yourself.
Nobody will sell your product better than you. Nobody cares about your revenue like you do.
Don't look for a silver bullet. Don't look for a "free sales team."
Build a product people want, and sell it to them directly. Partners are for when you've already won.
Don't pay a tax on your own success.
Written by XQA Team
Our team of experts delivers insights on technology, business, and design. We are dedicated to helping you build better products and scale your business.