There are inherent challenges which come along with a Sales & Distribution Channel Partner vs. Direct Sales Teams: Limited Influence: As Channel partners are independent entities who are not on any fixed compensation, you cannot direct or use authority to get your work done. As a stand-alone business, they pursue their own interests which may or may not be aligned with yours. Potential Risk to Reputation: A Channel partner can be a ‘Make or Break’ for your brand. A partner who does not act, sell or promote as per the ethics or standards of your organization could spoil your brand. Receivables Defaults: A Channel Partner having taken Sales Credit from you, is a risk to your financials. Even if your product is selling well, but he is not doing well as a business, your partner could default on the payments. Lack of Predictability: A partner being a stand-alone business will push your competitor’s products if they are easy to sell or he is getting a better commission. Therefore a high performing channel partner could lose traction in a short time due to shifting loyalties. Working Capital-Inventories blockage: Channel Partners could take-up your stock, but take time to sell. This means that you sometimes are not able to give your good to partners who need it and sell it faster.