What is a Resell?
Resell is a business model where channel partners buy products. They then sell these products directly to end customers. Partners often manage the entire sales cycle. They handle billing and customer relationships. This model benefits vendors by expanding market reach. It allows partners to offer complete solutions. For example, an IT channel partner buys software licenses. They then package these licenses with their own services. They sell this combined solution to their customers. In manufacturing, a distributor buys industrial components. They then resell these components to smaller manufacturers. This helps smaller manufacturers access necessary parts. A strong partner program supports these reseller relationships. Many vendors use a partner portal for deal registration.
TL;DR
Resell is a business model where channel partners purchase products or services. They then sell these items directly to end customers. Partners manage sales, billing, and customer relationships. This expands vendor market reach. It allows partners to offer complete solutions.
"Resell partners form the backbone of many successful partner ecosystems. Vendors must offer compelling incentives for these channel partners. A robust partner relationship management system simplifies operations. It helps partners register deals efficiently. Effective partner enablement ensures their selling success. This model drives significant channel sales growth."
— POEM™ Industry Expert
1. Introduction
Resell describes a business model. Channel partners purchase products from a vendor. They then sell these products directly to end customers. This model is fundamental to many industries. It allows vendors to expand their market reach. It also enables partners to offer comprehensive solutions.
Partners take ownership of the product. They manage the sales process. They also handle customer relationships and support. This creates a distributed sales force for the vendor. It empowers partners to build their own customer base.
2. Context/Background
The resell model has deep historical roots. It originated from traditional distribution channels. Vendors often lacked the resources to sell everywhere. They needed help reaching diverse customer segments. Partners filled this gap. They provided local expertise and market access.
Today, this model is still vital. It helps companies scale their operations. It reduces direct sales costs for vendors. For partners, it offers new revenue streams. It allows them to bundle vendor products with their own services. This creates more value for the end customer.
3. Core Principles
- Product Ownership: Partners buy and own the inventory. They take on inventory risk.
- Customer Relationship: Partners directly manage customer interactions. They handle sales, support, and billing.
- Value-Add: Partners often add their own services. This enhances the vendor's core product.
- Market Reach: Vendors gain access to new markets. Partners use their existing customer base.
- Profit Margin: Partners earn profit from the resale price. This incentivizes their sales efforts.
4. Implementation
Implementing a successful resell model involves several steps:
- Define Partner Tiers: Create different levels for partners. Each tier offers varying benefits and requirements.
- Develop a Partner Program: Outline the rules, incentives, and support. This forms the backbone of the relationship.
- Establish Pricing and Discounts: Set clear pricing structures for partners. Offer attractive margins for their efforts.
- Provide Training and Enablement: Equip partners with product knowledge. Offer sales and technical training.
- Implement a Partner Portal: Use a central platform for resources. This supports deal registration and communication.
- Measure Performance and Incentivize: Track partner sales and activity. Reward top performers through a robust partner program.
5. Best Practices vs Pitfalls
Best Practices (Do's)
- Clear Communication: Maintain open lines of communication with partners.
- Strong Partner Enablement: Provide ongoing training and tools. This ensures partners can sell effectively.
- Fair Deal Registration: Protect partner opportunities. Use a clear deal registration process.
- Competitive Margins: Offer attractive profit margins to partners.
- Dedicated Partner Support: Provide quick and effective issue resolution.
- Co-selling Opportunities: Actively engage in joint sales efforts.
- Through-Channel Marketing: Offer marketing materials and campaigns.
Pitfalls (Don'ts)
- Channel Conflict: Competing with partners for the same deals.
- Lack of Training: Leaving partners unprepared to sell the product.
- Poor Communication: Not keeping partners informed about product updates.
- Unfair Deal Registration: Not respecting partner leads and opportunities.
- Insufficient Margins: Making it difficult for partners to profit.
- Complicated Processes: Overly complex partner portal or sales procedures.
- Neglecting Partners: Failing to provide ongoing support and engagement.
6. Advanced Applications
For mature organizations, the resell model can evolve:
- Specialized Resellers: Partners focus on niche markets or vertical industries.
- Managed Services Providers (MSPs): Resellers offer product as part of a service bundle.
- Cross-Border Reselling: Partners expand market reach globally.
- Solution Bundling: Partners combine multiple vendor products for complex solutions.
- Volume Licensing: Resellers handle large-scale software or hardware deployments.
- White-Label Reselling: Partners brand vendor products as their own offerings.
7. Ecosystem Integration
The resell model integrates across the Partner Ecosystem Operating Model (POEM) lifecycle. During Strategize, vendors define their reseller strategy. In Recruit, they identify suitable channel partners. Onboard ensures partners are ready to sell. Enable provides ongoing training and resources like a partner portal. Market involves joint marketing activities and through-channel marketing. Sell focuses on co-selling and deal registration. Incentivize rewards partner performance. Accelerate fosters growth and deeper engagement within the partner program.
8. Conclusion
The resell model remains a cornerstone of many business strategies. It empowers vendors to scale their operations. It provides significant revenue opportunities for channel partners. A well-structured partner program is crucial for success.
Effective partner relationship management ensures strong, lasting partnerships. Clear processes, fair incentives, and robust partner enablement drive mutual growth. This model benefits vendors, partners, and end customers alike.
Context Notes
- An IT solution provider buys cloud software from a vendor. They bundle it with their integration services. They resell this complete solution to a small business.
- A manufacturing distributor purchases specialized machinery parts. They then sell these parts to local factories. This helps local factories maintain their equipment.