Channel Sales vs Affiliate Marketing: What Are You Really Selling?

Previously I wrote about how business is fundamentally simple: make something, sell it for more than it costs. Today, let’s use that concept in action to better understand it. We will use it to clear up something that often gets muddled: the difference between channel sales and affiliate marketing.

Both of these models help other companies sell their products, but they’re fundamentally different businesses because what they’re actually selling is different. Understanding this difference is crucial for choosing the right model and avoiding costly mistakes.

What Are You Actually Selling?

Affiliate Marketing

• The Product: Impressions and clicks
• The Customer: Companies wanting broad market reach
• What You Make: Content that attracts potential buyers
• What You Sell: Access to that audience
• Unit Economics: High volume, lower margin per transaction

When you’re running an affiliate marketing business, you’re not really in the business of selling your partner’s products - you’re in the impression business. Your “factory” produces content and attracts eyeballs. Your “product” is the attention of your audience.

Channel Sales

• The Product: Access to existing client relationships
• The Customer: Companies wanting to reach specific markets/clients
• What You Make: Deep client relationships and market expertise
• What You Sell: The ability to get meetings with decision-makers
• Unit Economics: Lower volume, higher margin per transaction

In channel sales, you’re selling trust and access. Your “factory” builds and maintains relationships with clients. Your “product” is the ability to get a vendor in front of the right person at the right time.

Why This Distinction Matters

I’ve seen companies try to run both models and mess up because they forgot what they were actually selling. Here’s an example: A successful channel sales company decided to “diversify” into affiliate marketing. They had great relationships with enterprise clients in the manufacturing sector, so why not leverage that for affiliate revenue too?

They failed because they were optimizing for the wrong thing:

• Their content strategy focused on maintaining their professional image with existing clients rather than attracting new audiences
• Their team was skilled at building deep relationships but struggled with creating engaging content at scale
• Their metrics were all wrong - they tracked relationship depth when they needed to track audience growth
• Their brand positioning confused both existing and potential clients

They were using their relationship-building “factory” to try to make an impressions “product.” It’s like trying to use a custom furniture workshop to mass-produce IKEA furniture - the tools, skills, and processes just don’t match the product.

Choosing Your Model

Using our basic framework (make something → sell it), here’s how to think about which model fits your business:

Choose Affiliate Marketing If:

• You’re good at creating content that attracts specific audiences
• You can produce this content at scale
• Your cost per impression is lower than what advertisers will pay
• You’re comfortable with high volume, lower margin transactions
• You have systems for automating relationship management

Example: A tech review blog that generates 500,000 monthly visitors and converts 2% to product purchases through Amazon links.

Choose Channel Sales If:

• You’re good at building and maintaining deep client relationships
• You have expertise in specific markets or verticals
• Your cost per relationship is lower than what vendors will pay for access
• You’re comfortable with lower volume, higher margin transactions
• You have systems for managing complex, long-term partnerships

Example: A sales consultancy that helps enterprise software companies enter the healthcare market through their network of hospital CIOs.

The “Factory” Metaphor

Think about it like running two different types of factories:

Affiliate Marketing Factory:

• Raw Materials: Market knowledge, content creation skills, audience data
• Production Process: Creating and distributing targeted content
• Quality Control: Engagement metrics, conversion rates, audience growth
• Output: Impressions and clicks
• Scale: Thousands or millions of interactions
• Key Metrics: Cost per click, conversion rate, audience growth rate

Channel Sales Factory:

• Raw Materials: Industry expertise, relationship-building skills, market insights
• Production Process: Building and maintaining client relationships
• Quality Control: Client satisfaction, deal success rates, relationship depth
• Output: Trusted introductions and partnerships
• Scale: Dozens or hundreds of relationships
• Key Metrics: Deal size, client retention, partnership longevity

Common Pitfalls

When people forget what they’re actually selling, they make mistakes like:

Affiliate Marketing Mistakes:

• Spending too much time on deep vendor relationships
• Creating content that’s too specialized for broad appeal
• Underinvesting in automation and scalability
• Trying to personally manage each customer interaction

Channel Sales Mistakes:

• Trying to optimize for page views and traffic
• Diluting relationship quality for quantity
• Using metrics that don’t reflect relationship value
• Automating processes that require personal touch

The Bottom Line

Remember the core principle from yesterday: make something, sell it for more than it costs. In affiliate marketing, you’re making impressions. In channel sales, you’re making relationships. Choose the model that matches what you’re actually good at making, and build your entire operation around optimizing that core production process.

Don’t try to be both - it’s like trying to run a mass production factory and a custom workshop under the same roof. Pick your model, optimize your “factory” for that specific product, and focus on being the best at that one thing.

Note: Next time someone asks you whether you do affiliate marketing or channel sales, don’t just answer with the label. Tell them what you actually make and sell. It’ll lead to a much more productive conversation about whether you’re the right partner for them.