There are so many reseller partnerships examples all around us that you can see one at every turn you make, starting from those reselling event tickets to the various companies that resell software on the internet through advanced marketing, other than the software vendor.
Hence, with the multiplication of resellers partnerships, the success of the business model, and the benefits it gives to both the Reseller and the software publisher, you can also see the presence of reseller partnerships in new business models such as software as a service.
The reseller partnerships in SaaS is very much the same as it is in other businesses. It entails resellers who often already have many existing and retained customer bases in SaaS selling the SaaS software to the vendor. Such a customer base is usually some particular group of people that the SaaS software vendor or company wants to reach.
These SaaS vendors and companies aim to use these SaaS Resellers to enter new markets – both global be regional markets, explore new verticals, and, in most cases, get new customers and broadened their user base. However, all these are in a drive to increase sales and boost revenue for the SaaS company.
Many SaaS companies continue to use SaaS reseller partnerships to grow their business or branch into newer fronts. A typical example is Australian SaaS company Atlassian, which uses resellers partnerships to dive into new markets and regions, especially where local language and support are required. In an interview in 2017, Atlassian’s president claimed that one-third of the company’s revenue comes from reseller partnerships.
However, Atlassian is just an example of a reseller in the SaaS space. It is just a tiny chunk of the many successes of SaaS reseller partnerships in the SaaS space.
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What is a SaaS Reseller Partnership?
A reseller partner is an organization whose business includes helping a vendor sell its SaaS products to customers. Some resellers generate their income from keeping a certain percentage of the software sales. However, the total amount of money resellers depends on many things, such as any of the following incentives;
- The presence of product discounts
- Product training and 1:1support.
- Lead flows top distribution level.
- The level of developing services consulting guidance.
In some cases, the SaaS reseller partnership agreement will include that the reseller will have the sole right to market and sell the SaaS vendor’s software and applications to a particular region or market for some time or number of years.
The fact is that reseller partnership is just a type of channel or ‘indirect sales.’ It involves an intermediary who stands between customers and the SaaS software vendor and makes sales on behalf of the software.
There are other forms of channel partnership that are excellently good in brokering deals and increasing sales. However, in the SaaS space, the use of resellers is preferred by most SaaS software publishers.
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Benefits, Challenges, and Disadvantages of a SaaS Reseller Partnership
Like every other thing or business model, there are two sides to this coin. Some benefits and some disadvantages may accrue to both the SaaS vendor and the Reseller from a SaaS reseller partnership. However, it is not every advantage or disadvantage that goes to both of them. To get you the best understanding of the Reseller Partnership concept, we have listed the benefits, or disadvantages of SaaS reseller partnership below. Let’s take a look first at the benefits of SaaS reseller partnerships.
Benefits of SaaS Reseller Partnership
To the Reseller
- The reseller gets the advantage of focusing on marketing and selling the product or service without worrying about the hassle of building the product or service.
- The reseller gets revenue share and makes money from selling the products, and makes additional income from selling value-added products in the case of the SaaS value-added reseller partnership.
- The reseller can also get exclusive rights to sell a product or service, giving it more control in the market, a huge competitive advantage.
- The reseller also benefits from the credibility it will build while selling a product with a good brand reputation.
- Higher metrics and KPIs achieved for the vendor can unlock perks like strategic in-house training for the reseller staff, SaaS products discounts, and many more. These tiers and partner certificates can help the Reseller get more clients in the SaaS Reseller business and become a top name.
To the Vendor
- Using the SaaS reseller’s established customer base reduces entry barriers when trying to venture into new markets or regions.
- SaaS Reseller partnership is another way for the SaaS vendor to diversify his revenue stream.
- The partnership removes the costs and time of hiring, training a sales and marketing team, especially if the vendor is looking to expand.
- It gives the vendor the ability to expand without relying on direct sales alone.
Disadvantages of SaaS Reseller Partnership
There are some disadvantages and challenges experienced with Reseller partnership, especially when reselling Cloud-based software products. Some of these accrue to the Reseller and some to the Vendor. Let’s take a look at them.
To the Reseller
In most cases, the SaaS Reseller expose to the SaaS vendor excesses because it is challenging to access pricing flexibility or the product’s limitations.
- Lack of training and support from the software vendor can reduce the Reseller’s ability to sell the SaaS product.
- The absence of product/market fit of the Vendor’s product with the Reseller’s customers can hinder the Reseller’s ability to sell the SaaS or even hit sales and performance metrics.
To the vendor
- There is a middleman – the Reseller between you and your customers, and in time, this might affect how fast you respond to feedback and address challenges.
- The partnership also puts the vendor’s reputation in the hands of the software reseller. The reputation can go bad with poor customer service, etc.
- It can also be very time-consuming to train, onboard Reseller partners. What’s more, you also have to invest in ecosystem ops. Ecosystem ops are the tools, processes, and workflows needed to accelerate reseller partner programs.
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What is the Difference Between SaaS Resellers and SaaS Value-Added Resellers?
There are primarily two types of SaaS Resellers;
- The traditional Resellers
- The value-added Resellers.
The Traditional Reseller
The traditional Reseller partnership is a situation in which an intermediary company resells the Vendor’s software or application to the end-users without any modifications or extreme cases, as few modifications as possible.
An example of SaaS traditional Reseller partnership is the one between fiscal foundation and the software publisher of Quickbooks;
The partnership is between Fiscal foundations, a finance and accounts management company, and Intuit, the company that owns QuickBooks. Fiscal foundation is Intuit’s reseller. It sells Quickbooks’ accounting and finance software products.
Fiscal foundations efforts had resulted in top-notch services and a large number of sales for Quickbooks -the products it sold Intuit’s licenses. It also offers customers and prospects customizations and the ability to use its virtual storefront to browse and check Intuit’s products, setup. It also provides customer support to Quickbook’s users.
Fiscal foundation benefits from the Reseller partnership from the sales incentives, in-house upgrades, the co-marketing, advertisement, co-selling, and the lead generation support it gets from Intuit. On the other hand, Intuit benefits from the Reseller partnership are increased sales and revenue. The fiscal foundation helps boost these as it acts as an additional sales arm to make more sales and revenue.
Another famous traditional SaaS reseller example is that between Carahsoft and DocuSign, it is a significant example of SaaS reseller partnership in the public sector.
DocuSign went into a Reseller partnership with Carahsoft, a government, IT solutions provider, to resell its e-signature software solutions to the public sector.
With the knowledge of the government procurement and buying process, Carahsoft made DocuSign a popular name in government offices in more than 800 local, state, and federal government agencies.
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SaaS Value-Added Resellers
This kind of Reseller partnership involves a reseller situation where the third-party company resells the vendor’s products with added implementation, training services, configuration, consulting, or add-ons. It might so be a combination of one or two of these new features to the product or service.
One famous example of value-added Reseller partnerships in the SaaS space is that which exists between Vena solutions and JMT consulting.
The financial planning and analysis platform Vena solutions went into a reseller partnership with JMT Consulting, a financial accounting management, and enterprise resource planning (ERP) company. With the nonprofit expertise and experience of more than 27 years, JMT Consulting had the proper knowledge of nonprofit budgeting and financial reporting to resell Vena’s products to nonprofits.
Vena benefits from tapping into JMT consulting customer base. While JMT, on the other hand, also benefits from the reseller partnership by selling value-added SaaS services such as Jumpsuit to help nonprofit organizations start and run-on Vena solutions products more quickly.
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Things SaaS Resellers must look out for before entering a SaaS partnership
To help curb some of the disadvantages and challenges that might come up in a Reseller Partnership, you must look out for some things in the partnership. This in-depth look is aimed for you to get a better partnership. Some of these things are the following;
1. Easy migration of the software’s data with industry existing tech
As the SaaS sphere grows, it is paramount for cloud-based software to succeed in the market with a product/market fit. It must be easily migratable with the existing tech within the industry. You must lookout for this feature in the software about the Reseller Partnership. For example, it must have Built-in connectors with the relevant popular platforms like Office 365, Outlook, Google calendar, etc.
The SaaS software or application must also have its own set of API. These APIs will allow resellers and software developers to access the data and features of the vendors’ platform. This accessibility enables the integration of the vendor’s features into the users exiting tech.
2. The presence of Incentives in the partnership
There must be some incentive involve in the partnership. As a reseller, you must take your time and review the kind of incentive therein. It could be a simple cost for each user set at a discounted rate for the Reseller. The Reseller can also select their go-to-market pricing strategy.
However, some SaaS reseller partners like to bundle their costs with other SaaS solutions that they offer, while others like to use a standalone fee. In whatever case, you must know that it is in the hands of the partner to choose the final price.
There are many advantages to bundling the cost with that of other SaaS solutions. These advantages include increasing the perceived value of all your offerings, starting from CRM, review management, mobile app development to website building by launching an integrated software solution. What’s more? It will also build a stickier end product.
3. Viable relationship in the partnership
Ensure that establishing the Reseller partnership would improve the relationship between the SaaS vendor and its customers.
4. Simple and straight implementation
Ensure that before the implementation begins, there is an examination of the scope and timeline of the reseller partnership written out in a statem6nof work. Each of the partners, the Reseller, and the Vendor will also have distinct requirements, and some can be complicated. Hence, the need for an initial consultation to be made during the onboarding to understand their needs.
This onboarding evaluation process makes the Reseller partnership easier for the reseller. It also makes the partnership compatible with every type of business. It, therefore, implements the SaaS software solution to the marketing and selling strategies, simple and straight to the point.
5. Right SaaS product that matches your business clients’ needs
Another thing you must look out for before entering a reseller partnership is to know if the SaaS product or application matches the need of your customer base. It should have the right product/market fit for the prospective users you will sell it to. You could try to answer questions like: will the software solution benefit my clients or customer base? What will be the value of the SaaS software to my client’s business? What are the pain points that this customer base is having? Will the software solve the problem for them? Etc.
6. Easy management of users accounts
You must also ensure that the reseller partnership comes with a business relationship and work where the management of the accounts of multiple customers easily. The SaaS vendor’s platform must have a reseller console that will allow access to some characteristics that will make the management and installation of numerous accounts easier under the partners. Such simplification must include the modification of accounts, adding or removing of accounts, etc.
Ultimately, the reseller console that the vendor will involve a place where the SaaS reseller will log in as an administrator and have access to users’ accounts without having to log in or off with the use of multiple usernames and passwords.
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How to Build and Keep a SaaS Reseller Partnership Profile
You must think about the type of business you want to partner with, and building a good partner profile is one of the best ways to become a successful reseller. It involves both what you intend to achieve for any partner and what you need from a partner vendor.
These points or factors will mark the SaaS reseller partnership beneficial to your company financially and otherwise. Some of these factors include the following;
1. Target Market you want to explore
Targeting a particular market is one of the first things to consider and do as a Reseller. It involves understanding critical factors about the market, the customer, or the region where both might exist.
The use of SaaS software is often predominant in a niche with a customer base. It entails researching and knowing enough about that niche and understanding how other companies are interacting with it. Ensure that whatever company that you approach sells products that are relevant to the market you understand. You must also understand the nature of that niche and customers looking to buy the products you will be selling for the SaaS vendor company.
2. Find Business Fit
There must be a business fit between that of the reseller and that of the SaaS vendor. While products and services might change as time goes, it is advisable to be on the elbow of changing your partner.
For example, as a value-added reseller, there must be a consideration of how your business can fit with that of the vendor to give customers the best experience.
It would help if you made an effort to use the same persona that your SaaS reseller is using. This match of persona will encourage people to buy the products more. It will also narrate to the public the business’s seriousness and build and merge the reputation.
3. Maintain Consistency Across all Channels
A key strategy for a winning SaaS business is communication with its clients. However, SaaS vendors must also keep the communication going through all their partnership channels just as they do independently.
Try using SEO tools in your communicating with your clients; you can also create your own that you can share with the SaaS vendor to use on their platform to help gather momentum around communicating with clients. Examples of such content include landing pages and lead generation emails.
4.Treat Your all Partners with Respect
Every SaaS reseller planning to become a top seller in the SaaS industry and be successful must always treat the partners with respect. Even though most SaaS vendors look down upon their resellers, who are always at their mercy, it shouldn’t be so. The respect you give to the partner would help make for a better input of their efforts.
A vendor must understand the resellers’ KPIs and make sure that they are not cruel. You must also make sure that the process of payment is direct, efficient, and smooth. It would help if you also made it easy for the reseller to work with you, define terms, give training, explain and describe the businesses in the target market, and give them explicit instruction, KPIs, etc.
The key to promoting your partner to be open to you is respecting them just as you would respect every other business partner.
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Bottom Line
With all these, be assured that you would get the best advantage and benefits from the partnership. You must know that you don’t need to depend on direct sales alone; you can use the SaaS reseller partnership model to make more sales, get more revenue and diversify into new markets. What’s more? The reseller partnership model could be the answer to you becoming a popular SaaS service provider. Go try it out.