Working with a software reseller, or a channel of software distributors, can help solve the problem of how to scale your
software sales and support. However, there are some key points to keep in mind if you are going to be successful in working with software distributors.
Bottom line, you must view the relationship with your computer software reseller as a joint partnership in sales. If you provide them with the sales support and training they need, understand exactly what you need from your reseller, and choose software distributors that fit that need then you are well on your way to channel success.
The Difference between Software Resellers and Software Distributors
So, what is the difference between a reseller and a distributor anyway? They are often used as synonyms, but usually the difference is a question of scale: a reseller may be quite small, new to selling your product, or very specialized in a specific customer segment, and sells directly to individual end customers. Distributors are usually larger, more established, and have a broad channel to sell through that might include both wholesale (to resellers) and direct to customers.
Keys to Success in Working with a Reseller
If you are considering working with a software reseller, there are a few key points to keep in mind:
Every reseller is different in the way they like to work with the software publisher. Talk to your prospective reseller, understand the way they like to work with software publishers, and ensure that meets your needs also. If not, find another reseller who does.
Make sure you provide effective sales training and support to your reseller. They are not going to be able to proactively sell your product out of the gate. Expect to spend some time initially working hand-in-hand with them on
software sales, providing them with sales materials and training. Once they see some success, then they will be in a much better position to replicate that themselves.
Make sure the reseller's sales process is aligned with yours. If you are selling <$20 downloadable software, then don’t select a reseller that is set up for high value orders and a long
software sales cycle.
Provide two tiers of reseller discounts: One for the people that will proactively sell your application (often these are consultants or small specialized service providers), and another smaller discount for the big software distributors that just take orders on behalf of their client. The first could be around 20-40%. The second should be no more than 10-20%.
When Not to Engage a Software Reseller
When should you choose not to work with a distributor or reseller?
If you are trying to find someone else to drive sales of your product, then a reseller may not be the way to go. Too many resellers are just order-takers, and most have little motivation to proactively try to sell your product. Remember that they have a number of different products that they sell, and are not usually exclusively focused on selling yours. If yours doesn’t sell itself well, then the reseller will focus on one of their other products that does.
Software distributors and resellers work best when the product is established and has a proven sales record that the reseller can build on.
When Should You Engage a Software Reseller?
If you keep in mind the key points above, there can be benefit to working with a software reseller. Just realize it is not for every software publisher. Below are some of the main benefits:
Reduced Support – most resellers will provide at least first-level technical support to their customers.
Market Breadth – resellers may be specialists in vertical industries or other niche segments that you don’t currently sell into. They may have specialized knowledge about how to sell into and support customers in those segments.
Existing Customer Relationships – if you are a small software house, you may not have established relationships or “trust” with your prospective customers. This is especially true if you are selling into large businesses. In that case, resellers have the advantage of already being on procurement’s “preferred vendor” list, and you can benefit from that by working with the reseller.
Influence – like it or not, some resellers do have significant influence on what their customers purchase. If you do not have a resale agreement with that software distributor, then they may be selling your competitor’s product instead.
Added Sales Focus – if properly supported, resellers can provide an extended sales force for your application. But keep the caveat above in mind, and don’t assume that all resellers will proactively go out and start selling your product immediately. Just like any new sales person, they need support and commitment from you to sell together.
If, after reading the tips above, you are still interested in finding software resellers to engage on selling your product, there can be a number of ways to identify good prospects.
You could always investigate the big software distributors like PC Ware, SOS Developers, etc. Realize they are not likely to provide specialized sales or support for your product.
To find more specialized resellers who sell to your
target customer base, it is best to use your industry network: meet with resellers at trade shows or events, ask prospective or existing customers which resellers they work with, take a look at the websites of your competitors and see which software resellers they use.