Channel Management Guide: How To Sell on Multiple Channels

You’ve likely heard the phrase “meet them where they are.” In today’s business environment, consumers expect ecommerce sites, retailers, and other companies to take that phrase literally. Successful businesses must deliver a consistent shopping experience for their customers across multiple channels—whether in store, online, on social media, or an online marketplace. That’s the essence of an omnichannel sales strategy.

A study found that 73% of shoppers use multiple channels during their sales journey. Furthermore, businesses with effective omnichannel strategies see annual revenue increases nearly three times greater than those without, according to Aberdeen Group research.

So, how can your business leverage those different sales channels to increase customer satisfaction and drive business growth? That’s where channel management comes in. This guide explains how channel management strategies work and how to create an effective channel management program for your ecommerce business.

What is channel management?

Channel management is the process of coordinating the various systems or channels a business uses to manage relationships with distribution partners and customers. Sales channel management (or distribution channel management) focuses on how businesses sell products, including direct and indirect methods. Sales channel management coordinates internal and external processes.

For example, channel managers may oversee direct channels, manage a company’s presence on online marketplaces, and coordinate with third-party distributors or channel partners. Effectively managing multiple channels can optimize sales performance, boosting revenues, reducing customer acquisition costs, and helping businesses grow. It can also improve customer satisfaction by helping businesses meet the growing expectations for an integrated brand presence across channels.

Although this article focuses on managing sales channels, note that channel management can also refer to the process of managing marketing channels, which is an internal process that involves developing a multichannel marketing strategy and using it to encourage purchases and strengthen customer relationships.

Sales channel types

Here’s an overview of both direct and indirect sales channel types:

Direct sales

Direct sales channels allow a business to sell directly to customers. Examples include a business’s ecommerce platform, brick-and-mortar storefront, or direct sales team. Managing these channels involves coordinating physical and online storefronts and supporting sales representatives.

Indirect sales

Indirect channels involve an intermediary in the selling process. They include wholesaler or retailer partnerships and online marketplaces like Etsy or Instagram Shopping. Indirect sales channel management tasks include coordinating a company’s presence on online marketplaces, analyzing channel performance, and communicating with third-party distributors, which is also known as partner relationship management.

How to get started with channel management 

1. Set goals
2. Identify channels
3. Create channel-specific strategies
4. Measure channel performance

Here are four steps to help you launch a successful channel management strategy for your ecommerce business:

1. Set goals

Setting clear goals for channel management helps you build a focused strategy and evaluate your channel program’s performance. It also spells out the relationship between channel management activities and a company’s larger business objectives, ensuring that optimizing channel performance supports company goals.

Use the SMART goal framework to set specific, measurable, achievable, relevant, time-bound goals for your program and identify the key performance indicators (KPIs) you’ll use to track sales performance. Common focus areas include increasing sales volumes, boosting profits, entering new markets, and improving performance with a particular customer segment. One example of a channel management goal would be to increase revenue from indirect channels by 10% by the end of the fiscal year.

2. Identify channels

Identify channels for your sales strategy. Here are several to consider:

• Online store. For an ecommerce business, your online store may be your primary sales channel. It’s a channel you completely control.

• Physical location. You may also have a brick-and-mortar shop operating in conjunction with your online store. A booth at the local farmers market or pop-up shop during the holiday season also qualify. 

• Direct sales team. For business-to-business (B2B) companies, hiring sales reps to sell products directly to customers may be an option to consider. 

• Online marketplaces. You can also sell products through online marketplaces like Etsy, Amazon, or TikTok Shop for associated platform and/or commission fees. 

• Third-party distributors. Retailers, wholesalers, resellers, or agents handle the selling, but you’ll share revenue and won’t have control over the customer experience.

Consider your goals, available resources, and target customer preferences to decide which channel types to pursue. If you’re short on cash and time, consider building a partner network to maximize revenues while minimizing internal sales management responsibilities. If customers in your target market overwhelmingly prefer to shop on social media sites, you might invest in social commerce, simplifying the sales process by prioritizing channels that integrate with your online store.

Shopping channels can also vary by industry. For example, customers frequently browse hospitality industry services (like hotel rooms) on third-party sites but buy furniture in retail stores so they can see and test it in person. 

3. Create channel-specific strategies

Building a coherent multichannel sales strategy requires channel-specific planning. Start by setting clear goals for each channel based on your larger channel program goal. If your main goal is to boost revenue from indirect channels by 10%, you might aim to increase sales by a smaller percentage across each contributing channel (e.g., online marketplaces and social media).

Then, map out channel strategies. If you manage a channel yourself, research how members of your target market interact with it and identify the strategies that drive success. You might learn that high-quality photos matter most on Instagram, for example, or that review count and average rating are key factors for Amazon buyers. For third-party-managed channels, create a plan to communicate with channel partners, considering onboarding, performance tracking, and ongoing support.

4. Measure channel performance

Effective channel management requires ongoing performance monitoring, so build performance measurement into your strategy. Here’s a list of common ecommerce KPIs:

• Revenue growth

• Share of target market

• Customer satisfaction score (CSAT)

• Reach

• Total engagements

• Engagement rate

• Click-through-rate (CTR)

• Conversion rate

Many companies also track the price at which channel partners sell products to end customers and calculate the percentage of prices returned to the company as profit.

Some customer relationship management (CRM) systems or channel management software systems come with advanced analytics tools that can automate elements of the monitoring process, pulling valuable insights from sales and customer data.

Tips for effective channel management 

• Choose channel management software
• Avoid channel conflict
• Prioritize communication with channel partners

Use these tips to get started managing multiple sales channels:

Choose channel management software

You can use channel management tools to support your channel management efforts. Many digital tools offer partner onboarding workflows, reporting dashboards, and collaboration tools, making it easy to share data and providing businesses and channel partners with ongoing access to performance metrics. Keeping all channel partner communications and datasets in one place also helps channel managers navigate the otherwise complex task of coordinating multiple channel strategies across diverse platforms.

As noted above, CRM systems can offer channel management features. If yours doesn’t (or you need more advanced features), look for a tool that integrates with your CRM and other key systems in your tech stack. Although marketing channel management is a separate process, tools that offer marketing automation can pull double duty, supporting sales and marketing campaign management on connected channels.

Avoid channel conflict

Channel conflict refers to any situation in which one channel damages another channel’s ability to sell. This can result from conflicting inventory data, competition for the same end customers, or differing customer service policies, and lead to reputational damage, price skepticism, and unfulfilled orders. A channel that refuses to provide support can result in customers who think you offer a defective product and discourage others from making purchases, and competition for the same customer group can result in a race to the bottom in selling prices.

 You can avoid conflict by setting minimum prices, which prevents channel partners from attempting to undercut each other on costs. Some businesses also centralize inventory management systems or take all customer service in-house, which can prevent accidental overselling and ensure a consistent customer experience regardless of purchase channel.

Prioritize communication with channel partners

Effective partner relationship management can help you optimize partner performance and maximize benefits to your business, so create a plan to support channel partners. Consider onboarding and product training, access to marketing materials and resources, and ongoing support systems.

Best practices include scheduling proactive outreach to maintain consistent communication with channel partners, providing ongoing sales and marketing support, and using channel partner feedback to identify and meet partner needs.