Are you ready to work with resellers? In this section we review key areas of the provider-reseller working relationship, ensuring you have the resources and processes in place to work effectively with resellers.
BUSINESS SELF-ASSESSMENT Partnering with resellers is a commercial arrangement. They market your business to new markets and new customers in exchange for a commission. The first question is, what level of commission can you support? OPERATIONAL: RESELLER COMMISSIONS Most resellers ask for 20%–30% which means on a €100 product, they want a net rate of €70 to
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€80. You can try to negotiate the commission level down. The lower you get your commission, the less margin the reseller has to market your products, the goal is not to squeeze it to the absolute minimum. A reseller may promote other products over yours if they have a higher margin on those products. Remember that the sales that you receive from resellers will be incremental. These should be sales that you wouldn’t
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get directly from customers. That said, it’s also important to remember that for reseller partners to market, sell, and support sales of your products, they need to be reasonably compensated for their efforts. They prioritise sales of products that are more profitable to them. Be sure to review your pricing to ensure you have enough margin to support the commission levels your reseller partners need to also be successful.