We paid a full sales-motion margin and got an introduction. For a long time I read that as a partner who was not trying. It was not. They were doing exactly what we had paid them to do.
We ran distribution into a category where a distributor already served the buyers we wanted. The logic was clean: they had the relationships, we had the product, and reach is the expensive part.
Then roughly eighty to ninety percent of the actual selling was still being done by us. Their rep would make an introduction. After that it was our people running the conversation, answering the technical questions, building the case and closing the deal.
For twenty points off wholesale.
“They are not putting enough effort behind us.”
“We need to train their reps properly.”
“Their people do not know the product well enough to sell it.”
“Maybe we need a better distributor.”
All four are about the partner. None of them is about the contract, which is where the answer was.
A sales motion is an ongoing cost: people, time, follow-up, technical support, the deals that do not close. It has to be paid for out of something that keeps arriving.
A one-time margin on a capital product arrives once. So a rational partner spends the smallest amount of effort that still earns it, and the smallest amount of effort is an introduction.
Which makes this a contract problem wearing a partner-performance costume, and no amount of enablement fixes a contract.
Here is the part that made it obvious in hindsight. A distributor performs four separable functions, and we were paying for all four while receiving three.
| What a distributor can do | Were we getting it? |
|---|---|
| Credit carrying the buyer | Yes |
| Logistics stock, shipping, returns | Yes |
| Catalog reach being in front of buyers | Yes |
| The sales motion creating and closing demand | No. We were doing it |
Three of four functions, at the four-of-four rate. That is not a bad partner. That is a mispriced contract, and it is the most common channel mispricing there is.
“Distributor” is a category. The rate should come from the service list, not the category name.
This is where I would have gone next, and it would have been wrong. Cutting the margin to match the work would have stopped the leak and produced nothing.
A one-time-margin product never earns a sales motion at any rate, because the problem is the shape of the money rather than the size of it. Repricing fixes a margin leak. It does not create a growth motion.
So the remedy was to remove the layer. We went direct to the partners who would actually sell, and paid them in a way that rewarded selling.
Does this partner earn a recurring stream from this product, or a one-time margin? Consumables and capital-plus-annuity get sold. One-time capital equipment gets a door opened, at best.
I have watched a lot of companies run a perfectly healthy distributor relationship and stay flat for years. Nothing is broken. Everybody is professional. The revenue does not move.
Operating costs are fixed and the profit number is committed, so twenty points off wholesale lands almost entirely on reinvestment. You gave away the money that builds a demand engine, in exchange for reach.
Which makes single-motion distribution self-sealing. You cannot build the demand engine that would let you grow, because you already spent the budget that builds it. And the shape of that is stable rather than failing.
Such a company is not in trouble. It is in equilibrium: funded, predictable, and structurally unable to accelerate. That is a much harder thing to notice than a decline, because nothing about it looks like a problem.
Gate one, will they actually sell it? The annuity test above. Most companies ask this one.
Gate two, can you grow through them alone? The margin test. Almost nobody asks this one, and a product can pass the first gate and still fail the second.
This is not an argument against distribution. It is an argument against running one motion and expecting it to compound. One motion sets a ceiling, and this one sets a lower ceiling than most, because it is paid for out of the growth budget.
Write down what your channel partner does for you, function by function, then write down the rate. If the sales motion is on the list and you are the one running it, you already know what the gap is worth. The model is free and it will show you what the same margin buys if you spend it on demand instead.
Run the model, free No account. Your numbers stay in the link.