The term reseller is actually a lot broader than it sounds. A reseller is someone who sells products, but that can mean a lot of different things. There are many ways work with resellers, and if you’re not considering a reselling strategy already, it’s time to take advantage this growing segment that has the potential to drive significant revenue. Many sales techniques have proven track-records of success, but reselling can provide unique benefits that create a win-win situation for both providers and resellers.
Types of Reselling Businesses
Basically, there are six types of reselling businesses. No matter which type of reselling model a business chooses, the importance of partner relationship management—the system that enables providers to track and manage resellers— cannot be stressed enough. Before delving into the ins and outs of partner relationship management, here’s a breakdown of the reseller models that can utilized to market, promote, and sell products and services.
Affiliates: Affiliates drive traffic to a sales team so they don’t have to spend time prospecting for qualified leads. Typically, these individuals or businesses are given a trackable link that they put on their websites. When a buyer clicks the link and purchases a tracked product or service, the affiliate receives a percentage of the sale.
Referral Partners: Like affiliate resellers, referral partners drive traffic to sales teams; but, unlike affiliates, referral partners are able to pass on leads in other ways, such as in person or by telephone. Commissions may be paid per lead or per sale.
Value Added Resellers (VARs): In the case of VARs, it’s the reseller’s job to sell providers’ products—in the case of software, usually online or in person—while adding features or services to enhance the product and make the offer more desirable and competitive. Some VARs buy “stock,” a set number of software licenses for example, while others provision new application instances on-demand.
Partner Channels: In most cases, partner channels are used by larger technology companies. Partner channels understand the intricacies of the product or service and can explain it to customers. These salespeople are still considered resellers because they’re not directly employed by the primary company and thus are reselling for commission.
Retailer: Retailers purchase your product or service in a large quantity and then sell it in their stores both online or offline. Since many applications are transitioning to the cloud, including Microsoft Office and Adobe Creative Suite, boxed software on a retail shelf is becoming increasingly rare.
Drop Shippers: In the realm of physical goods, drop shippers set up their own shop, sometimes an ecommerce store or catalog, and take orders for products. They pass the orders to the provider, who fills the order for them. Both parties set pricing is independently.
Resellers are most effective when they have strong support and guidance. It’s essential that providers give them tools to market and sell products and services. For example, targeting customers by targeting specific affiliate marketers. If you’re selling business applications and your affiliate operates a business technology blog, that’s an ideal situation; however, if you’re selling business software and your potential affiliate operates a health and beauty blog, where’s the benefit?
Moreover, providers need a system for managing these individuals and businesses. A good system includes the resellers identifying information, provides them with tools to sell products, creates affiliate links, and offers a content management system (CMS). A CMS allows providers to create content for the resellers to then publish on their websites; it’s particularly useful for providers who are interested in having products and services represented in a specific way.
Overall, reselling is a great way to drive revenue. It pushes products and service into the market without high advertising costs. In fact, it costs little to nothing until the reseller makes a sale or buys stock. Once again, that’s a win-win for everyone.
[GD1]“Partner Channels” is too vague. VARs could be a partner channel. This should be deleted or replaced with something else, like “Marketplace Listings: For cloud-based software, online marketplaces can be a good option. …” Etc. etc. See article for background: http://techcrunch.com/2015/10/09/sell-saas-they-said-it-will-be-easy-they-said/