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What are the standard margins and volume requirements in vendor partner programs?

Margins and volume requirements vary across the different vendor partner programs. Learn how to determine whether the margins and volume requirements offered in a vendor partner program are reasonable.

Q: What are the standard margins and volume requirements in vendor partner programs?

Meet the expert
Angela Vines is co-founder and vice president for partner services at ServiceKey, an independent provider of hardware service and maintenance for mid-range servers, networking and storage equipment based in Norcross, Ga. She has 18 years of channel development and management experience with hardware and services. Download her entire podcast on vendor partner programs.

 Channel partners want the highest margins with the lowest volume requirements, and that's understandable. Realistically, in the industry, margins for hardware and software are around 30% off the manufacturer's list pricing. Then the discounts are contingent on volume requirements.

If volumes are extreme and milestones are too large, this really can create constant churn in a vendor partner program, and the channel partner ultimately loses. They lose money, they lose time and they lose ownership of their customers. They really need a flexible program with no volume requirements.

The reality is that a lot of vendor programs eliminate what they consider a bottom tier of partners that don't meet their expectations. We've made it our practice never to say no. Every opportunity is important. And if you take those volume restrictions out of the program and make it easy and have flexibility, your channel partners are always going to work with you. So a lot of vendors are actually missing the boat from a customer loyalty standpoint.

Return to the vendor partner programs FAQ guide and read the rest of Angela's expert responses.

This was last published in March 2008

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