Insights

Why distribution partnerships, and when they are the wrong answer

Distribution partnerships exist because acquiring a customer directly costs more than reaching one who is already somewhere else. Where that is not true, a partnership is expensive theatre.

The arithmetic

A partnership is a way of reaching customers who are already gathered somewhere. The question it answers is narrow: is it cheaper to reach this customer through somebody who already has them than to acquire that customer directly.

That is an arithmetic question and it has a wrong answer as often as a right one. Where your cost to acquire is already low, a partner takes margin and adds a dependency. Where the partner's customers are not your customers, volume never arrives and both sides spend a year finding out.

What the dataset shows about the shape

Most companies that supply a capability to somebody else's customers appear in this dataset once. That is the normal case. A supplier with one distribution partner is not failing at partnerships; it is doing the thing most suppliers do.

The exceptions are companies whose product is the distribution itself. Card issuers, payment platforms and core banking vendors accumulate partners because each new partner is the same arrangement repeated, not a new arrangement negotiated.

Three cases where a partnership is the wrong answer

The partner does not control the moment. Distribution works when the partner is present at the point the customer decides. A partner who is merely adjacent to that moment delivers introductions, not volume.

The economics only work at a volume neither side can commit to. A revenue share that requires scale to be worth running is a pilot that will be quietly abandoned.

The capability is not ready to be operated by somebody else. A product that needs your team in the room is not a product a partner can distribute.

Written from the partnership dataset, where every count links to the rows it came from.