Partner vs. Reseller – Defining Both in the Software World
Disclaimer: The word Partner can mean many things. This post will attempt to define a partner in a software/technology world.
There are many programs in the software space that include the word “Partner” in their title. People today have an aversion to have anything sold to them. Since the word Reseller includes the word sell, I think many have replaced it with the less threatening term Partner.
I think there are a few key elements that distinguish a Partner relationship vs. a Reseller relationship. While one could argue that Partners are also Resellers, it’s important to understand that not all Resellers are Partners.
In general, Partner programs have more flexibility and fewer requirements than a Reseller program. I’ve created a grid below to outline the similarities and differences between the two models.
Access to Sales Collateral – The software provider will create materials to enable the seller to present benefits, product specs, etc.
Lead Restrictions – Is the sales environment competitive? Does the software provider require leads to be registered? In many reseller programs, incentives are voided if the software provider or other partners have engaged with the lead in the past.
Pricing requirements – Does the Partner or Reseller need to hold a list price of any kind? Many models require this and carve out a commission (see next definition) for the seller.
Incentive Structure – Commission or revenue sharing is a common incentive for a Reseller program. Partner programs have much more flexibility. Partners receive a substantial discount from list pricing. They then can choose to bake it into a retainer, pass through discounted costs or mark the price up as they see fit.
Referrals – If a Partner or Reseller provides value added services, they often receive referrals from the software provider if customers have a need for such a service.
The Right Fit
While the comparison above shows many important benefits of a Partner model, there still is a scenario that could favor a reseller program. If Resellers are focused on transactional relationships and have capacity to execute these at a high volume, Reselling can be beneficial. It is also common for resold customers to contract directly with the software provider vs. the reseller, so consider this arrangement as well.
At Optify, we’ve worked hard to differentiate our Partner Program and create many of the benefits outlined above. We strive to give our Partners flexibility to fit Optify into their business models, no matter how unique options. Drop us a line if you’re interested in learning more!