Reseller
A partner who purchases your product at a discounted rate and resells it to end customers, often bundled with their own services. Unlike affiliates who earn commissions, resellers manage the customer relationship directly.
Understanding Reseller Partnerships
Resellers are partners who purchase your product at wholesale pricing and resell to end customers at higher prices, capturing the margin. Unlike affiliates earning commissions, resellers buy inventory and take on revenue/inventory risk. Reseller model suits products with channel partner ecosystems. Value-added resellers (VARs) add implementation, customization, or bundling on top of product. Example: marketing agency bundles your software with their consulting services, selling complete solution to clients.
Reseller Economics and Structure
Reseller typically purchases 40-60% below list price. Example: your SaaS lists at $100/user/month, reseller buys at $50/user/month, sells to end customer at $80-90/user/month. Reseller margins (25-40%) compensate for sales effort, support, and risk. Resellers need: discounted pricing structure (tiered based on volume), marketing and sales support, pre-sales and post-sales support, training and certification, co-marketing resources. Establish reseller agreements defining: pricing, minimum volume commitments, exclusive territories (optional), support responsibilities, term length, and termination clauses.
Building and Managing Reseller Channels
Identify potential resellers with established customer bases in your target market. Agencies, VARs, and distribution partners are common reseller candidates. Provide comprehensive partner enablement: product training, sales training, marketing materials, case studies, and sales tools. Track reseller performance: volume, customer count, revenue generated. Top resellers typically generate 10-30x more revenue than affiliate counterparts due to deeper integration and bundled value. Healthy reseller programs achieve 2:1 to 4:1 ROI—reseller margin costs justified by volume generated. Create tiered reseller structure (bronze, silver, gold) with increasing benefits for higher-performing partners. Gold partners receive: lower pricing, dedicated support resources, co-marketing budget, and leadership involvement in product strategy. Manage reseller margins carefully—excessive margins reduce company margin; insufficient margins demotivate resellers. Industry standard reseller margins 30-40% for B2B SaaS.
