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Noun

[diss-tri-byu-shun]

In SaaS, distribution refers to the channels through which a product is sold to a customer, encompassing the entities and processes that are used to deliver cloud-based software to end users.

Distribution can be performed through direct selling and selling through intermediaries, which are referred to as distributors. Direct distribution is when the vendor sells the software directly to customers. Indirect distribution involves third-party distributors or resellers to end users. Both direct and indirect distribution can be utilized by vendors as part of an overall distribution strategy.

Example: Revello utilized both a direct distribution strategy, selling their software straight to customers, as well as an indirect distribution strategy, using resellers to reach a wider market and outsource some of the sales work.

Noun

[dir-ekt cha-nul]

A direct channel is a sales channel through which goods and services are sold by the manufacturer directly to an end user. These traditional channels don't involve partners of any sort. In direct sales, the end user can purchase the product through online marketplaces, mail order, or face-to-face sales, as long as there is no intermediary distributor or salesforce other than the original manufacturer.

Direct channel gives the manufacturer more control over the sales process of their product and often comes with lower overhead costs. That said, direct channel doesn't have the reach and revenue potential that channel sales can offer. Note that many software companies utilize both direct and channel sales in their overall sales strategy to take advantage of the benefits of both.

Example: An example of direct channel would be going to the PartnerStack website and purchasing the software directly from the PartnerStack sales team. You'd be getting the software straight from the manufacturer without any intermediaries involved in the sales process.