So what are the alternative approaches? And when should you use them? Julian Dent, chief executive of VIA International, mapped these out. Delegates then explored the different approaches in workshops.

Dent sees two main ways of working with partners. Firstly, we have sell-through, where the partner is paid a discount, commission or a fee for its part in the transaction. Secondly, we have sell-with, where the supplier is co-operating with other parties to share a business opportunity.

Dent reckons that each of these two approaches can be split four ways, according to the degree of vendor control and the closeness or length of the relationship.

Straight discount - the favoured, traditional approach

In sell-through, the traditional approach of a straightforward discount remains by far the most common approach. This applies in most industries including pharmaceuticals and IT. And there are many ways in which this approach can be tweaked to give suppliers more control.

In particular, suppliers should move to a model where they are measuring and rewarding their own sales staff on actual sales made by resellers and distributors to end users, rather than for simply stuffing partners and intermediaries with product!

Differential compensation - tricky to police

An alternative is to pay more compensation to some partners than to others. Typically, differential compensation encourages partners to build up their skills or to spend more time and energy marketing the supplier's products.

Most delegates already reward large orders with higher compensation. But they were all keen to explore how to reward partners for doing other things. However, most felt that this model had yet to be proven.

One of the biggest problems is how to police such schemes. Ian Kent, head of channel policy Europe at Microsoft, said: "When we launched the NT operating system, we gave higher margins to partners who were prepared to train NT programmers. But we hit problems. Firstly, we found the big established resellers would bottomfish the orders. A small, skilled reseller would do the programming and then lose the sale to a larger reseller, who would give the software away."

"Secondly, we found that big resellers, with established large account bases, swiftly headhunted the programmers from the smaller players, depriving them of their advantage." Other delegates had similar experiences!

Agency - EU makes life difficult

Agency is another alternative. Here, the vendor pays a commission fee to a partner for making a sale, but makes the sale directly to the customer. However, Dent pointed out that European law makes agency extremely difficult to implement, as the European Union gives agents similar rights to employed sales staff.

Most delegates felt that agency was just too complicated to work properly in Europe.

But there were dissenting voices. Paula Staunton, a partner at solicitors Osborne Clarke, said: "One way round all this is to reward agents for finding business, but to ensure that the closing of the sale is done by the vendor. You can then reward the intermediary for its marketing, without giving it agency rights." She says that Osborne Clarke has recently drafted contracts like this for several clients, including a small software vendor.