For companies that sell through channel partners, Pocket Revenue rather than Sales Revenue is a more accurate measure of indirect sales. Pocket revenue is the actual revenue that goes into the pockets of the companies after deducting all channel incentives.

Typically, companies use a fixed list price and a variety of Channel Incentives to customize their pricing for each channel partner. Channel Incentives can be generally classified into Trade Rebates, Special Discounts, Price Protection Programs and Market Development Funds. In general, Channel Incentives can account up to 20% to 30% of sales revenue.

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