Building an indirect sales channel for the first time means making decisions before you have all the answers. One of the earliest — and most consequential — is figuring out which types of partners actually fit your product. The terminology doesn’t help. VARs, MSPs, distributors, referral partners, resellers, agents — these terms get used interchangeably in some conversations and very precisely in others.
This article breaks down each major channel partner type, explains what they actually do, and helps you think through which ones align with your go-to-market motion.
Why Channel Partner Types Matter Before You Recruit
Recruiting the wrong type of partner wastes time for everyone involved. A referral partner won’t install your software. A distributor won’t provide the hands-on technical support your customers need. A VAR who primarily serves enterprise clients won’t move product into the SMB segment you’re targeting.
Getting clear on partner types before you start recruiting means better program criteria, more targeted outreach, and expectations that both sides can actually meet.
Value-Added Resellers (VARs)
A value-added reseller buys your product, bundles it with their own services or complementary solutions, and sells the combined package to end customers. The “value-added” part is what sets them apart from a simple reseller — they’re not just passing your product along. They’re integrating it, customizing it, or wrapping professional services around it.
VARs typically own more of the sales and delivery relationship with the end customer than other partner types. They handle implementation, training, and ongoing support. In return, they earn margin on the product itself and bill separately for services.
When VARs work well for IT vendors
VARs are a strong fit when your product requires configuration, integration, or ongoing management that the average buyer can’t handle on their own. Cybersecurity software, ITSM platforms, and data management tools are common examples. If there’s a meaningful services layer around your product, VARs can build a practice on top of it.
The challenge is that VARs are selective. They’ll evaluate whether your product fits their existing customer base and service capabilities before committing. A VAR already selling a competing product in your category is unlikely to add yours unless the differentiation story is compelling.
Managed Service Providers (MSPs)
MSPs manage IT infrastructure and services for their clients on an ongoing, subscription basis. They’re not primarily resellers — their business model is built around recurring managed services contracts. But they frequently bundle software products into those contracts as part of their standard stack.
For IT software vendors, MSPs are one of the most valuable partner types available. When an MSP adds your product to their stack, they’re not making a one-time sale. They’re deploying it across their entire client base and renewing it month after month.
What MSPs look for in a vendor program
MSPs evaluate vendor programs differently than VARs do. Their priorities tend to center on:
- Multi-tenant management: Can they manage multiple client instances from a single console?
- Recurring revenue model: Does the vendor’s pricing structure support subscription-based billing?
- Technical support quality: When something breaks at 2 a.m., what does support actually look like?
- Margin and licensing flexibility: Can they bundle or white-label the product without running into complex licensing constraints?
MSPs are also concentrated in specific geographies and verticals. Finding the right ones for your product often means filtering by region, existing vendor relationships, and technical specialization — which is exactly what the Elioplus partner database is built for, with verified channel partners across 50-plus countries.
Distributors
Distributors sit between vendors and resellers in the channel hierarchy. They don’t typically sell to end customers directly. Instead, they buy product in volume from vendors and sell it to a network of resellers, VARs, and sometimes MSPs.
The main value a distributor brings is reach. A single distribution agreement can open the door to hundreds or thousands of downstream resellers you’d never be able to recruit and manage individually. Distributors also handle logistics, credit, and sometimes first-line technical support.
The tradeoff with distribution
Distribution is efficient at scale, but the tradeoffs are real. You give up margin at each tier of the channel. You lose direct visibility into who’s actually selling your product and to whom. And you can lose control over how your product is positioned and priced in the market.
For early-stage IT vendors, signing a distribution deal before having a working channel program is a common mistake. Distributors move product that already has demand — they’re not going to create it for you. Before approaching distributors, it’s worth having a proven sales motion, clear partner enablement materials, and at least some direct channel relationships already in place.
Referral Partners
A referral partner doesn’t resell your product and doesn’t manage delivery. They introduce qualified prospects to your sales team and earn a commission or fee when a deal closes.
This is the lightest-weight partner relationship available. There’s no product training requirement, no certification, no support obligation. A referral partner might be a consultant, an accountant, a systems integrator who doesn’t sell software, or a complementary software vendor whose customers frequently need what you offer.
When referral programs make sense
Referral programs work best when you have a strong direct sales motion and need more top-of-funnel pipeline. They’re also useful in markets where you don’t yet have established resellers — a referral relationship can be a low-friction way to start building presence in a new geography.
The risk is that referral partners are easy to sign and easy to neglect. Without regular engagement, a partner who seemed enthusiastic at signing will go months without sending a single lead. Referral programs need active management even though the partner relationship itself is simple.
Other Partner Types Worth Knowing
Channel Partner Types Explained: VARs, MSPs, Distributors, and Referral Partners
- Why Channel Partner Types Matter Before You Recruit
- Value-Added Resellers (VARs)
- When VARs work well for IT vendors
- Managed Service Providers (MSPs)
- What MSPs look for in a vendor program
- Distributors
- The tradeoff with distribution
- Referral Partners
- When referral programs make sense
- Other Partner Types Worth Knowing
- System Integrators (SIs)
- OEM Partners
- Agents and Independent Sales Representatives
- Choosing the Right Mix of Partner Types
- Managing Different Partner Types Without Losing Your Mind
- FAQs
- Start Building Your Channel with the Right Foundation
Building an indirect sales channel for the first time means making decisions before you have all the answers. One of the earliest — and most consequential — is figuring out which types of partners actually fit your product. The terminology doesn’t help. VARs, MSPs, distributors, referral partners, resellers, agents — these terms get used interchangeably in some conversations and very precisely in others.
This article breaks down each major channel partner type, explains what they actually do, and helps you think through which ones align with your go-to-market motion.
Why Channel Partner Types Matter Before You Recruit
Recruiting the wrong type of partner wastes time for everyone involved. A referral partner won’t install your software. A distributor won’t provide the hands-on technical support your customers need. A VAR who primarily serves enterprise clients won’t move product into the SMB segment you’re targeting.
Getting clear on partner types before you start recruiting means better program criteria, more targeted outreach, and expectations that both sides can actually meet.
Value-Added Resellers (VARs)
A value-added reseller buys your product, bundles it with their own services or complementary solutions, and sells the combined package to end customers. The “value-added” part is what sets them apart from a simple reseller — they’re not just passing your product along. They’re integrating it, customizing it, or wrapping professional services around it.
VARs typically own more of the sales and delivery relationship with the end customer than other partner types. They handle implementation, training, and ongoing support. In return, they earn margin on the product itself and bill separately for services.
When VARs work well for IT vendors
VARs are a strong fit when your product requires configuration, integration, or ongoing management that the average buyer can’t handle on their own. Cybersecurity software, ITSM platforms, and data management tools are common examples. If there’s a meaningful services layer around your product, VARs can build a practice on top of it.
The challenge is that VARs are selective. They’ll evaluate whether your product fits their existing customer base and service capabilities before committing. A VAR already selling a competing product in your category is unlikely to add yours unless the differentiation story is compelling.
Managed Service Providers (MSPs)
MSPs manage IT infrastructure and services for their clients on an ongoing, subscription basis. They’re not primarily resellers — their business model is built around recurring managed services contracts. But they frequently bundle software products into those contracts as part of their standard stack.
For IT software vendors, MSPs are one of the most valuable partner types available. When an MSP adds your product to their stack, they’re not making a one-time sale. They’re deploying it across their entire client base and renewing it month after month.
What MSPs look for in a vendor program
MSPs evaluate vendor programs differently than VARs do. Their priorities tend to center on:
- Multi-tenant management: Can they manage multiple client instances from a single console?
- Recurring revenue model: Does the vendor’s pricing structure support subscription-based billing?
- Technical support quality: When something breaks at 2 a.m., what does support actually look like?
- Margin and licensing flexibility: Can they bundle or white-label the product without running into complex licensing constraints?
MSPs are also concentrated in specific geographies and verticals. Finding the right ones for your product often means filtering by region, existing vendor relationships, and technical specialization — which is exactly what the Elioplus partner database is built for, with verified channel partners across 50-plus countries.
Distributors
Distributors sit between vendors and resellers in the channel hierarchy. They don’t typically sell to end customers directly. Instead, they buy product in volume from vendors and sell it to a network of resellers, VARs, and sometimes MSPs.
The main value a distributor brings is reach. A single distribution agreement can open the door to hundreds or thousands of downstream resellers you’d never be able to recruit and manage individually. Distributors also handle logistics, credit, and sometimes first-line technical support.
The tradeoff with distribution
Distribution is efficient at scale, but the tradeoffs are real. You give up margin at each tier of the channel. You lose direct visibility into who’s actually selling your product and to whom. And you can lose control over how your product is positioned and priced in the market.
For early-stage IT vendors, signing a distribution deal before having a working channel program is a common mistake. Distributors move product that already has demand — they’re not going to create it for you. Before approaching distributors, it’s worth having a proven sales motion, clear partner enablement materials, and at least some direct channel relationships already in place.
Referral Partners
A referral partner doesn’t resell your product and doesn’t manage delivery. They introduce qualified prospects to your sales team and earn a commission or fee when a deal closes.
This is the lightest-weight partner relationship available. There’s no product training requirement, no certification, no support obligation. A referral partner might be a consultant, an accountant, a systems integrator who doesn’t sell software, or a complementary software vendor whose customers frequently need what you offer.
When referral programs make sense
Referral programs work best when you have a strong direct sales motion and need more top-of-funnel pipeline. They’re also useful in markets where you don’t yet have established resellers — a referral relationship can be a low-friction way to start building presence in a new geography.
The risk is that referral partners are easy to sign and easy to neglect. Without regular engagement, a partner who seemed enthusiastic at signing will go months without sending a single lead. Referral programs need active management even though the partner relationship itself is simple.
Other Partner Types Worth Knowing
System Integrators (SIs)
System integrators build and connect complex IT environments for large organizations. They’re similar to VARs but typically work on larger, more complex projects. Enterprise SIs are their own category, but regional and mid-market SIs are very accessible to growing IT vendors and worth considering early.
OEM Partners
An OEM partner embeds your technology into their own product and sells it under their brand. This is a high-commitment, high-value relationship. OEM deals require significant technical integration work and formal agreements, but the revenue potential is substantial — your product ships as part of theirs.
Agents and Independent Sales Representatives
Agents sell on your behalf without taking title to the product. They’re common in telecom and some infrastructure markets. Unlike referral partners, agents are often more deeply embedded in the sales process — running demos, negotiating pricing, and managing the customer relationship through to contract signing.
Choosing the Right Mix of Partner Types
Most IT vendors don’t build a channel around a single partner type. The right mix depends on your product, your target market, and where you are in your growth stage.
A useful reference point:
| Partner Type | Sells to End Customer | Manages Delivery | Recurring Revenue Potential | Best For |
|---|---|---|---|---|
| VAR | Yes | Yes | Medium | Products needing integration/services |
| MSP | Yes (via managed services) | Yes | High | Subscription software, security, infrastructure |
| Distributor | No (sells to resellers) | No | Low (per unit) | Scale and geographic reach |
| Referral Partner | No | No | Low | Pipeline generation, new markets |
| System Integrator | Yes | Yes | Medium-High | Complex enterprise deployments |
Company stage matters here too. If you’re transitioning from direct to indirect sales for the first time, starting with a small number of high-quality VAR or MSP relationships almost always produces better results than trying to build every partner type at once.
Managing Different Partner Types Without Losing Your Mind
Each partner type has different needs from your program. VARs need strong product training and co-marketing support. MSPs need multi-tenant tools and reliable support SLAs. Referral partners need a simple deal registration process and fast commission payments. Distributors need clear pricing tiers and sell-through reporting.
Managing all of this in spreadsheets or a generic CRM is where most early-stage channel programs fall apart. A purpose-built PRM handles deal registration, lead distribution, onboarding workflows, and tier management in one place — which is what the PRM module at Elioplus is designed to do, with a free tier available for vendors just getting started.
FAQs
What is the difference between a VAR and an MSP? A VAR buys and resells your product, often bundling it with professional services for a specific project. An MSP manages IT services for clients on an ongoing basis and typically includes software as part of a recurring managed services contract. The key difference is the business model: VARs are often project-based, while MSPs operate on monthly or annual subscriptions.
Can a partner be both a VAR and an MSP? Yes, and many are. Plenty of channel partners have evolved to offer both project-based resale and ongoing managed services. When recruiting, it’s worth understanding which part of their business is larger and how your product fits into each motion.
What is the easiest channel partner type to start with? Referral partners are the easiest to sign because the commitment is low on both sides. That said, VARs and MSPs typically generate more revenue per relationship because they’re actively selling and delivering your product. For most IT vendors, starting with three to five committed VAR or MSP relationships produces faster results than building a large referral network.
How do distributors differ from resellers? Distributors sell to resellers, not to end customers. Resellers — including VARs — sell directly to end customers. Distributors operate higher up the channel hierarchy and function primarily as a logistics and credit layer. Resellers are the ones with direct customer relationships.
When should an IT vendor approach distributors? Distribution makes the most sense after you have a proven sales motion, clear partner enablement materials, and existing channel relationships that demonstrate demand. Distributors are better at scaling existing demand than generating new demand for an unfamiliar product.
What do MSPs look for in a vendor partner program? MSPs prioritize recurring revenue structures, multi-tenant management capabilities, responsive technical support, and flexible licensing that fits their subscription billing model. They also evaluate whether your product fits their existing customer base and whether your margins are competitive with alternatives they’re already selling.
How do I find the right channel partners for my product? Start by defining the partner profile that fits your product — geography, technical specialization, existing vendor relationships, and customer segment. A verified partner database filterable by those criteria is the most efficient way to identify candidates, rather than relying on inbound applications or conference networking alone.
Start Building Your Channel with the Right Foundation
Understanding channel partner types is the first step. The harder part is finding the right partners in the right markets, recruiting them efficiently, and managing those relationships as your program grows.
Elioplus combines a verified partner recruitment database covering 50-plus countries, outreach automation to connect you with potential partners, and a full PRM for managing existing relationships — all in one platform built specifically for IT vendors. You can start with the free PRM tier and explore everything available at elioplus.com
