For a rapidly growing company seeking greater growth, a large established channel partner who wishes to place large orders at high prices would seem like a great opportunity.What factors could make this a terrible idea for a new venture, that an entrepreneur must first look at?
Will you need to incur fixed costs to serve this channel partner, and what share of your present, and near-term revenue is this partner representing? This is necessary to avoid entering into a situation where your channel partners bargaining power is too great and where you will be unable to cover your fixed costs if they demand a lower price or volume in the future.
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