Direct vs indirect sales. Which to build first.

The short answer. Control and margin, against reach and speed.

Direct sales puts your own employees in front of the customer, closing the deal under your full control and keeping the entire margin, minus what it costs to employ them. Indirect sales hands that relationship to a third party, a reseller, a value-added distributor, a referral or affiliate partner, who sells on your behalf in exchange for a commission or a wholesale discount. Neither model is universally better; the right choice depends on what your business needs more urgently, control over the sale, or reach into a market your own team cannot cover yet.

Early-stage and newly launched products lean direct almost by default, because a founder or a small direct team is the only one who can sell a product before the pitch, pricing and objection-handling have been refined through real conversations. Indirect channels earn their place once that groundwork exists and the constraint becomes coverage, too many potential accounts, too many regions, too many segments, for a direct team to reach cost-effectively on its own.

How they differ. The trade-offs, side by side.

The cost picture has shifted further towards indirect channels in recent years. The EBSTA 2024 GTM Benchmark Report found partner-sourced revenue carries a customer acquisition cost around 25 per cent lower than direct sales motions, and a win rate roughly 35 per cent higher, largely because a partner brings a trusted relationship the buyer already has, rather than one a direct rep has to build from a cold start. At the same time, direct sales costs have been rising: CAC across most B2B categories increased sharply between 2023 and 2025 as competition for attention and stricter data-privacy rules made cold outbound less efficient than it used to be.

Run the numbers on a concrete example. A SaaS product selling at £12,000 a year through a direct rep might spend £4,000 in fully loaded acquisition cost per new customer, salary, tools, ramp time, once averaged across a rep's book. The same deal sold through a reseller earning a 20 per cent commission costs £2,400 in commission, no salary attached, but the business only keeps £9,600 of the annual contract instead of the full £12,000. Direct wins on total pounds retained if the rep is productive enough; indirect wins on cash outlay and speed if the reseller can close deals a direct hire would take a year to start generating. Neither number is right in isolation, which is why the decision has to be made against your specific cost of hiring and your specific partner's commission structure, not a generic rule of thumb.

That shift shows up at the industry level too. IDC figures put software channel sales revenue at roughly USD 70 billion in 2024, up from around USD 30 billion in 2019, and Forrester research has found the majority of B2B organisations now forecast their indirect revenue growing faster than it has in previous years. None of that means direct sales is obsolete, plenty of high-value, complex deals still need a direct rep who can navigate procurement and a multi-stakeholder buying committee, but it does mean the assumption that direct is always the default first move deserves reconsidering earlier than it once did.

Which to use and when. A decision framework, not a rule.

Start direct when the product is new, the pitch is still being refined through live objections, or the deal size and complexity justify a rep who can manage a long, multi-stakeholder sale personally. Direct sales is also the right default when the customer relationship itself, the renewal conversation, the account-growth opportunity, is a core part of the business's long-term value, since handing that relationship to a partner from day one makes it hard to reclaim later.

Add indirect channels once three conditions are met: the core pitch is proven and repeatable enough that someone outside the founding team can deliver it credibly, the target market or segment is large enough that direct coverage would require hiring faster than the business can afford, and margin can absorb a partner's commission without the unit economics breaking. A UAE-based SaaS company expanding into Saudi Arabia, for example, often finds a regional reseller with existing enterprise relationships reaches decision-makers in months rather than the year or more it would take to hire, train and ramp a direct regional team from scratch. This is the same sequencing logic covered in our guide to a market entry strategy for tech companies, prove the model first, then scale coverage through the fastest available route.

Running both together is common at scale, direct for the largest, most strategic accounts, indirect for the long tail a direct team cannot economically serve. The one real risk is channel conflict, a partner and a direct rep chasing the same account, which is a solvable problem if account ownership rules are agreed before it happens rather than negotiated for the first time mid-dispute. For the wider set of routes a product can take to market, our piece on distribution channels, explained covers the structural taxonomy this decision sits inside.

How Lauren would decide. The question that actually settles it.

Ask which constraint is actually biting right now: is it that the pitch is not landing consistently, in which case more distance from the customer through a partner will only make that worse, or is it that the pitch works fine but there simply are not enough of your own people to reach every account that wants to buy, in which case a partner solves exactly the right problem. Businesses get this wrong most often by reaching for indirect channels to fix a direct-sales problem, hoping a partner will succeed where an internal team is struggling, when in fact a partner will simply surface the same weak pitch faster and with less patience for fixing it, since their incentive is to sell what already works, not to help you find product-market fit.

Once you go to market, keep tracking the same two things regardless of which model you choose: fully loaded cost per pound of revenue, salaries and overhead for direct, commission and discount for indirect, and how long each deal actually takes to close. A model that looks cheaper on paper but takes twice as long to close is not obviously the better choice once the opportunity cost of that delay is counted, so decide on the full picture, not the first number that looks favourable.