Procurement

  • 4 min read

Reseller Agreements - A Definite Guide

Tathagata Chakrabarti

6th October, 2022

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IT reseller agreements are different from software agreements as there are complexities involved due to channel partners. This post will guide you through various factors controlled by the reseller agreement and gives you breathing space before negotiating with resellers.

With the rise of SaaS adoption, there is growth in the market of SaaS buying options. This growth leads SaaS providers to find easier ways to reach their customers and stay ahead of the competition by meeting the customers' requirements. Also, it has given birth to IT resellers.

IT resellers are involved in purchasing software, hardware, and many other services from manufacturers, wholesalers, and distributors and selling them to their customers. 

It involves direct resellers and value-added resellers (VARs).

As the name suggests, value-added resellers or VARs procure existing software, customize it to suit your requirements, and then sell it. This selling is often done through an e-commerce marketplace. The growth of online sales has created a great opportunity for IT resellers. 

Some of the benefits of VARs are:

• With Value-added resellers, you have the option to choose your solution.

• You can avail of multiple services in one place.

• It eliminates the need to contact various manufacturers and hence, saves time.

• It ensures that the product or service delivered is tailored to your specific needs.

• It offers priority support levels.

In this post, we will discuss the various factors controlled by the reseller agreement.

What Does the Reseller Agreement Include?

The IT reseller agreement with the organization helps to understand the relationship between the SaaS supplier and the IT reseller. The suppliers have certain expectations from the reseller when making the deal on their behalf. In return, the resellers earn commission on sales along with perks as an added advantage.

There are many factors that are controlled by the reseller agreement and software reseller program. 

This includes:

1. Software Pricing

Pricing is a factor that is determined by the suppliers. Suppliers control the commission and list pricing as a term of the agreement. IT resellers cannot control the pricing.

While making a deal, resellers have limitations over discounting or volume benefits. They can offer only what is mentioned in the agreement with the supplier. Their pricing is a matter of contract. Hence, making SaaS buying expensive.

2. Reseller Branding Rights

The software resellers are offering is not owned or developed by them; the suppliers will manage the brand standards and usage requirements. 

The reseller agreement will determine how a supplier will represent the relationship with the reseller. For example, if the agreement mentions a “white label,” it will allow the reseller to offer the software product with its own branding.

3. Consulting Rights

Suppliers are always concerned about the relationship between the reseller and the organization. Fulfilling and satisfying your requirements is always the priority. This leads to defining the consulting rights in the agreement.

The supplier outlines what value-added services (if any), like setup, support, consulting, etc., a reseller can offer you. This varies depending on the reseller contract terms.

4. Purchase and Resale Methods

Mostly, the method of resale is outlined in the reseller contract. Sometimes, the reseller directly purchases only licenses from the software manufacturer. In this case, the reseller has only licensed to offer to you. 

On the other hand, the reseller has the power to facilitate the purchase of the software, but the delivery of licenses will happen directly from the software supplier. 

For example, the organization desires to purchase Grammarly from an IT reseller. The reseller is only authorized to sell the licenses according to the reseller agreement with the supplier. In this case, the reseller can only offer the licenses of Grammarly to you. 

5. Customer-Specific Obligations

The reseller agreement with the supplier will speak for the customer-specific obligations. Depending on the agreement, the reseller might be responsible for end-user paperwork. It will outline the supplier’s responsibilities to provide support to the licenses purchased through resellers.

It is essential for you to understand whom to approach for addressing the issues and what level of service your reseller will be able to offer after the purchase. This will give you clarity on how knowledgeable your reseller is in handling the issues.

Moreover, the support should extend to the service level agreements which are put in place when purchasing software.

6. Deal Registration

Deal registration is a very significant part of the sales practice, but the organization may not be involved. It takes place while being engaged with a software reseller, the deal is locked by the reseller and supplier during their discussion.

Through this, the supplier authenticates the lead verification process, ensuring that the reseller and supplier relationship stays strong. However, it may become more cumbersome for SaaS buyers to explore other options while buying with this deal registration in their path.

Use Zluri To Save Money on SaaS Purchases

Zluri purchases and renews all of the SaaS apps in your organization and helps you get the best deals. We offer SaaS purchase services that will reduce your software expenses. We are not limited to price but also negotiate a better SaaS agreement for you.

Our SaaS buying services help you to save money. We take care of the negotiations on your behalf and save your employees' time on negotiations. We get you the SaaS app you need when you need it. 

Consider us to be an extended member of your procurement team. We communicate with a vendor on your behalf using your company’s email. This gives us more leverage for negotiations and strengthens transparency and trust.

We have benchmark data on SaaS prices and have knowledge of fair pricing. We will provide you with the SaaS apps of your choice at the best price for different types of licenses across the globe. This supports you in keeping your business moving.

Moreover, negotiation prices depend on the factors associated with your requirements, like which license tier is required, how many users of SaaS apps are required, etc. These factors influence the pricing, and we negotiate to get you the appropriate deal.

We understand each category of the software product and the price associated with it. We modularize the price for the company as we have the data and experts who will help you get better pricing.

We help you with savings and assist you in negotiating the tools of your choice for the best price. Also, we churn out unutilized licenses or duplicate apps from your existing subscriptions. 

We get the closure done for you, including all the checkpoints cleared by your legal, security, and finance teams. We do proper documentation of each contract, and you can start tracking and monitoring the SaaS apps.

Zluri knows the SaaS marketplace and can help you get the best SaaS stack for your business in your allocated budget. We help you save by planning your SaaS buying. The renewal window period has an added advantage, with savings of up to 50% on subscriptions and guaranteed savings.

About the author

Tathagata Chakrabarti

Tathagata is a Technical Content Writer with 4+ of experience in the SaaS industry. He has a keen eye for research and understanding macro trends in the SaaS & AI-based technology space. He has worked across several marketing & strategy roles in various domains like banking, e-commerce, and education sectors. In his leisure time, Tathagata is a full-time PC gamer.