saas, resale, commissionsLaunched IT monitoring SAAS product 2 months ago, gotten a decent amount of traction and are now talking to various companies about reselling… would /love/ to understand how folks are dealing with partner channels when it comes to comissions… what’s practical in the Enterpise IT industry?
We’re potentially working with the following partners (am I overthinking the breakdown?)
Affiliates - someone who is promoting our service on their blog/website with a special link.
Basic Reseller - someone who is handling buying for a customer who only deals with preferred buyers. IE: customer finds us (or we find the customer), signs up for our product, loves it, hands the purchasing reigns to their reseller-partner who then expects a discount to deal with us
Active Reseller - someone who is promoting our product within their customer base and thru speaking, evangelizing.
System Integrator/VAR - someone who will not only help promote our product, but also help set it up for their customers.
First off, see the pointers in this similar question:
https://startups.stackexchange.com/questions/4038/how-to-hire-and-commission-resellers-affiliates-and-contract-sales-people
Regarding whether you’re overthinking your breakdown, the answer is yes, but only slightly:
Your distinction between active and less active resellers is in fact the result of your commission plan. In a nutshell, there are two thresholds to pay attention to:
For the first, think thank you note, token amount, a dinner for two, two tickets to a concert for their trouble. No more than a few percentage points. It’s an important threshold because upon reaching it the question morphs from “how much do I like them?” to “how much will I make?”.
Between the two thresholds, the commission is high enough that what they’ll make is on their radar, but not high enough to warrant their actively spending time on promoting you. They’ll mostly mention you as an aside when the opportunity arises, and this means you’ll basically be overpaying them for very little effort.
Past the second threshold, interest naturally spikes. But there’s no magic figure. The reason is simple: a salesperson’s time and attention are divided between tasks that yield a certain amount of commission for a certain amount of effort. And a salesperson is quick to spot what yields the most commission. If reselling you is a mere matter of putting you forward as you close a deal with your usual clients, think low commission. If, in contrast, your product requires active selling, you’ll need to make it worth the salesman’s time.
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