A firm runs the risk of upsetting its channel partners if it sells through two channels simultaneously which compete for the same customer. For example, if Electronic Arts sold its electronic games through retailers like Wal-Mart and Best Buy, and then started selling the same games online, Wal-Mart and Best Buy might get upset, because the online sales undermine their ability to sell the games through their stores. This type of situation is referred to as:

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This situation is referred to as channel conflict. It occurs when there is a disagreement or competition between channel partners due to differences in goals, objectives, or strategies. In this case, the retailers are upset because Electronic Arts is selling the same product online, which takes away sales from their stores. This can lead to tensions and strain the relationship between the company and its channel partners.

A Firm Runs the Risk of Upsetting Its Channel Partners