Channel strategy

Channel Strategy

Before starting

Confirm (ask or infer) before running:

• Product type — hardware-only / hardware + software bundle / OEM component / consumable?
• Target vertical — which industries or use cases are you targeting? (determines SI vs distributor fit)
• Geography — single market or multi-region? (partner availability varies sharply by region)
• Price point and deal size — what is the typical order value? (low-ACV = distributor; high-ACV = SI or direct)
• Deployment complexity — does the product require integration, installation, or commissioning? (complex = SI required)
• Current channel — do you have any active partners today, or is this a new motion?
• Pillar 3 status — has the three-pillar check been run? Channel decisions are Pillar 3 — they cannot produce a valid margin model without Pillar 1 (product force) data.

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Contract

This skill guarantees:

• No channel type is recommended without a margin model that shows positive distributor margin
• Partner qualification uses explicit, measurable criteria — not gut feel
• Channel conflict rules are defined before you have two channels (not after the first conflict)
• MDF is allocated as a performance incentive, not an upfront relationship gift
• The output names which channel type to lead with and why — not a list of "explore all options"

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Role: Channel Architect. You design hardware distribution as an economic system, not a relationship network. The right channel partner is a force multiplier. The wrong one is an expensive delay. Your job is to make that distinction before commitments are made.

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Inputs

Required before proceeding:

• Product description and target application
• Target vertical(s) and geography
• Unit economics: hardware list price, target gross margin, acceptable channel margin
• Deployment complexity assessment (self-install vs. SI-required)
• Any existing partner relationships or channel commitments

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Step 1 — Channel type selection

CHANNEL SELECTION LOGIC

Input: deployment_complexity, deal_size, vertical, geography

IF deployment_complexity = high (integration, commissioning, application-specific configuration)
  AND deal_size = high (>$50K per deployment)
  → PRIMARY CHANNEL: System Integrator (SI)
  Rationale: SIs own customer relationships in factory automation, assembly,
  warehousing. A good SI relationship opens an account base of dozens to
  hundreds of factories. They are your sales force you don't pay until close.

IF product is a subsystem embedded in a larger machine
  → PRIMARY CHANNEL: OEM / machine builder
  Rationale: OEMs build the machines your hardware ships inside.
  Volume is predictable. Margin is lower. Roadmap dependency is the key risk.

IF deployment_complexity = low AND deal_size = medium (<$50K)
  AND product can be installed without vendor support
  → PRIMARY CHANNEL: Value-Added Reseller (VAR)
  Note: VARs add limited integration; best for simpler scenarios or
  geographically constrained markets where SI density is low.

IF product is commoditized / spare parts / replacement units
  OR geography has low SI penetration
  → CHANNEL: Distributor
  Note: Distributor holds inventory and handles logistics.
  No technical services. Use for volume, not enterprise sales.

IF ICP is primarily direct buyers with digital discovery behavior
  AND product can be evaluated and purchased without an SI intermediary
  → CHANNEL: DTC (direct-to-customer) — run hardware-gtm/online-growth alongside

MULTI-CHANNEL NOTE:
  It is common to run SI + distributor in parallel.
  Define channel boundaries before announcing to either party.
  Undefined boundaries = channel conflict = partners stop bringing deals.

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Step 2 — Partner qualification

Not all partners in your channel type are worth pursuing. Use this criteria set before investing in enablement.

PARTNER QUALIFICATION CHECKLIST

Required — must meet all:
  [ ] Vertical fit: active in the industries where your hardware has the best application fit
  [ ] Technical capability: can deploy your system reliably without constant support from you
  [ ] Customer relationships: has active, trusted relationships with your target buyers
  [ ] Revenue commitment: willing to commit to a target number (accounts or units in 12 months)

Assessed — weight against each other:
  [ ] Revenue potential: how many accounts can they realistically deploy in 12 months?
  [ ] Competitive alignment: do they currently recommend a competing product?
      If yes — how strong is that relationship? Is there a performance gap you can exploit?
  [ ] Reference check: have they successfully deployed automation projects of similar complexity?

EXPLICIT DISQUALIFIER:
  IF partner wants to represent you "to explore" without committing to a target number → DISQUALIFY.
  Partners who commit to a number are the ones who will actually sell.
  Partners who want to "explore" are using you as an insurance option while they sell something else.

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Step 3 — Co-sell mechanics

Define the co-sell model before the first joint opportunity. Ambiguity at the handoff creates channel conflict.

CO-SELL STAGE DEFINITIONS

Lead identification:
  Your role: provide target account list in partner's territory
  Partner role: warm the relationship; initial discovery call

Technical qualification:
  Your role: support site survey and feasibility assessment
  Partner role: own the customer relationship; manage timelines

Demo / POC:
  Your role: provide equipment and technical support (run /demo-strategy)
  Partner role: manage customer expectations; own the demo schedule
  See hardware-gtm/poc-pilot/SKILL.md for POC design

Proposal:
  Your role: provide hardware pricing, delivery timeline, warranty terms
  Partner role: build the integrated solution proposal including integration costs

Close:
  Your role: support escalation or executive engagement if needed
  Partner role: own the contract relationship and closing conversation

Installation:
  Your role: send commissioning engineer for first 1-3 installs per partner
  Partner role: own integration and customer training after certification

THE RULE: never let the partner feel like you're trying to take over their
customer relationship. Partners who feel threatened by their vendors stop
bringing opportunities.

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Step 4 — Partner enablement stack

ENABLEMENT ASSET CHECKLIST (ship before partner has first customer meeting)

  [ ] Demo unit or showroom system
      Partners demo to customers without shipping equipment each time
      IF no demo unit exists → BLOCK partner rollout until resolved

  [ ] Application library
      Videos and specs for every supported application, organized by industry
      Partners answer "does it handle [specific part]?" with a video, not a description

  [ ] Sales training (2 days maximum)
      Cover: how to qualify opportunities, position against alternatives,
      run ROI conversations. Do NOT cover: everything about the product.

  [ ] Technical certification program
      Partners can install and commission without hand-holding
      Without certification: your engineers are on-site for every install = not scalable

  [ ] ROI calculator
      Shared tool for building the business case with customers
      Must be partner-customizable (their labor rates, their throughput, their downtime costs)

  [ ] Competitive battlecard
      How to respond when a customer mentions your top 3 competitors

ANTI-PATTERN: building an elaborate partner portal before you have 5 active partners.
Portals scale what already works. Start with a shared folder and a messaging channel.

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Step 5 — MDF allocation and channel conflict rules

MDF ALLOCATION RULES

Allocate MDF as performance incentive (not relationship gift):
  IF partner closed ≥1 deal in prior quarter → eligible for MDF in following quarter
  IF partner has no closed deals → no MDF; offer co-investment in a specific activity instead

High-ROI MDF activities:
  - Partner co-invests alongside your MDF (skin in the game)
  - Activity has measurable outcome: demo bookings, qualified leads, not "brand awareness"
  - Partner has a track record of executing similar activities

Banned MDF uses:
  - Trade show sponsorship without a follow-up plan and committed partner presence
  - Generic "brand awareness" activities with no conversion path
  - MDF to partners who are not actively closing

CHANNEL CONFLICT RULES (define before you have two channels)

  Rule 1: territory or vertical boundaries explicitly stated — who owns which accounts
  Rule 2: when a direct lead comes from a partner's customer, the partner gets deal
          registration credit — no exceptions
  Rule 3: defined escalation process — a named person, decision within 5 business days

WARNING: A partner who loses a deal to your direct team once will never bring
you another opportunity.

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Output format

## Channel Strategy Brief

**Product:** [Name]
**Target vertical:** [Industry / use case]
**Geography:** [Region / country]

### Channel type selection
Primary channel: [SI / OEM / VAR / Distributor / DTC]
Rationale: [2-3 sentences — why this channel type for this product/market]
Secondary channel: [if applicable]

### Partner qualification criteria
Must-have: [Vertical fit, technical capability, commitment to target number]
Disqualifiers: [Specific conditions that disqualify a partner]

### Co-sell model
[Stage-by-stage ownership table — who does what at each stage]

### Enablement assets (priority order)
1. [Asset] — status: [ready / in progress / missing]
2. [Asset] — status: ...

### MDF policy
Eligibility: [Condition for MDF access]
Banned uses: [What MDF cannot be spent on]

### Channel conflict rules
Territory/vertical boundaries: [Definition]
Deal registration: [Policy]
Conflict escalation: [Named owner + SLA]

### Margin model
Partner margin at list price: [X%]
Acceptable deal discount floor: [Y%] (below this = negative distributor margin)

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Brain reads / writes

If a companion brain repo is connected:

Before starting:

• Read channels/channel-history.md — which channels and partners have been tried; what performance signal exists
• Read knowledge/icp-map.md — ICP segment informs which channel type your buyers use for procurement

Brain write (after channel strategy is defined):

• Write to channels/channel-history.md: channel type selected, partner qualification criteria used, any partners qualified or disqualified with reason

Brain not connected: proceed normally.

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Anti-patterns

Anti-pattern	Why it fails	Fix
Choosing SI channel without assessing deployment complexity	If the product can self-install, SIs add cost without value and slow the sales cycle	Match channel type to deployment complexity and deal size first
Onboarding partners without a target number commitment	Partners without a number "explore" your product while selling something else	Require a 12-month unit or account target before signing the agreement
Building a partner portal before 5 active partners	Portals scale what works; they don't create what doesn't	Start with a shared folder; invest in portal when you have portal-worthy volume
Giving MDF upfront as a relationship investment	Partners spend it on activities they'd have done anyway; no incremental output	MDF is earned by closed deals in prior quarter, not given in anticipation
Running direct and channel without conflict rules	First channel conflict destroys both relationships	Define territory, deal registration, and escalation rules before any partner is signed
Selecting a channel partner because they're enthusiastic	Enthusiasm ≠ sales ability; enthusiasm without a committed number = slow death	Qualify on vertical fit, technical capability, and committed target
Accepting indefinite "exploration" from a partner	Partners exploring your product while selling competitors = wasted enablement investment	Set a decision deadline: if no committed target within 60 days, end the conversation

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Benchmarks (2025–2026)

Benchmark	Value	Notes
SI partner ramp time (from signed to first closed deal)	4–9 months	Depends on technical complexity and their active pipeline
Active SI partners needed before investing in enablement portal	≥5 active	Build lightweight tools first
MDF high-ROI threshold	Partner co-invests ≥25% of activity cost	Below this: no measurable commitment
Channel margin for distributor (hardware, industrial)	20–35%	Below 20%: distributors deprioritize your product
SI margin on solution (including integration services)	35–55% blended	Hardware margin lower; services margin higher
Deal registration protection window	90–180 days	Varies by vendor; longer = better partner trust
Partner-sourced deal close rate vs. direct	60–80% of direct close rate	Partners know the buyer; conversion is high when opportunity is well-qualified

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Related skills

Skill	When to use
hardware-gtm/launch/SKILL.md	After channel is defined: launch requires channel strategy (Pillar 3)
hardware-gtm/poc-pilot/SKILL.md	Co-sell mechanics include POC design for each partner opportunity
hardware-gtm/demo-strategy/SKILL.md	Partner enablement requires a demo strategy; SIs demo to customers
hardware-gtm/recurring-revenue/SKILL.md	Channel contract structure should include recurring revenue components from Day 1
pmm/icp-research/SKILL.md	ICP card defines which buyers use which procurement channels

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Validation criteria

• Channel type selected with explicit rationale (not "we'll try multiple channels")
• Partner qualification criteria defined with at least one explicit disqualifier
• Co-sell mechanics defined stage by stage
• Enablement asset checklist completed with status for each asset
• MDF policy defined: eligibility condition and banned uses
• Channel conflict rules defined before any partner is signed
• Margin model confirms positive distributor margin at list price

References & Sources

Tier 1:

• hw-channel-partner-gtm (growth-skills v1.0, score 8/10): partner type taxonomy, co-sell mechanics, MDF allocation, channel conflict rules
• Manufacturing GTM frameworks (2026): channel economics, distributor margin standards, partner ramp time benchmarks