The interview focused on the most important points: 1. What is a reseller contract? 2. Different types of partnerships and why should they be established? 3. Motivation and incentives for resellers 4. Processing of reseller contracts in Asia 5. See exclusive distribution in these markets 6. How to Find Good Resellers in Asian Markets Interview Transcript Drew: Tell me a bit about the reseller agreements you have and the type of partnerships you encounter Mark: It`s all about customer success. Some big tech companies like Microsoft are changing the compensation structure of their sellers to reflect the importance of acquiring the technology: The commission/bonus is not only paid on the basis of a sale, but also based on the commitment with the product The reason is simple and solid, especially in the world of subscription revenue: if I sell a ton of Zoom licenses and no one uses them, then guess what? Finally, the customer will not renew the contract. Therefore, it is important to broaden the perspective of customer service from the beginning. The same goes for a product that relies heavily on implementation: licensing fees are only part of the package, and if implementation is not successful, licensing fees are likely to be one-time, while what companies are aiming for is obviously a long-term, multi-year subscription. Therefore, it is in the best interest of these companies to create an environment (including incentives) and a partnership network that ensures proper implementation. Mark: That`s right. If you`re my end customer and I`m selling you percent, that`s the price.
If I do this through a reseller, my price for the reseller for the same offer would be 80. The reseller can sell it to you for a hundred. They can sell it to you for 90. I also complete the increase of 150. It`s actually the best practice to have levels. Instead, each reseller gets a 20% discount. They say, okay, if you`re a Bronze partner, you get a 10.15% discount. If you brought more volume, you will receive 20%, 25% discount.
If you are a platinum partner, the wholesale price you would get is, for example, 30% off. Because I know you bring that kind of transaction volume. I was recently reminded that the term “reseller agreement” can often mean different things to different people. Misunderstandings about these types of relationships create a risk of misunderstandings and waste of time formulating the wrong terms. Mark: It`s interesting. I didn`t, but no one ever asked for it. The way I see it is that when you step in and do a really good job for us and we continually deepen our relationship, I`m not motivated to find someone else. Unless it`s a very special thing: this reseller is an expert in, say, the financial and insurance industry and now I want to try to target shipping. I would first ask the guys, “I want to do this vertically. Are you interested? And if they`re honest and say, “Look, that`s not really our thing.
We do not want that. I`ll find someone else. Mark: I don`t like exclusivity. Unless a reseller is willing to pay you for it. This is the only way to give exclusivity: they guarantee me an income for the first 12 months (or the duration of the term). The amount depends on the product, the market, expectations, trading capacity, etc. But exclusivity must be bought, not given. Drew: And so you also have to structure an agreement for implementation? Mark: There are two slightly different types of partnerships, aren`t there? What data companies sell as a product are data and data flows, APIs. On the other hand, companies sell a complete software or software suite as opposed to the data flow.
And this may require implementation. Partnerships and the two parties are slightly different, the way they work is slightly similar, but has important differences. Viktor: Then, when it`s mostly emerging markets, when you enter a market, especially as a relatively unknown brand, because you`re not Microsoft or Salesforce, you have to create a lot more incentives in a certain way until the brand is built. But somehow, this market, especially if you take the people, will negotiate the of everything you put on the table. You also don`t want to start with the height being too high. What is a good startup rate considering that you are a relatively unknown new startup, like, say, seriously a startup that has just appeared. Does it make sense to really push high, create a lot of excitement, get a lot of dealers or do we start low because everyone will be negotiating about it anyway? Let me add two things that come to mind in terms of exclusivity. As I said, I am not used to doing exclusivity and trying to dissuade people from doing it. But they always ask, “How many resellers do you have in this market?” I usually tell them, “My goal is not to have a lot of dealers. My goal is to have very good relationships. If you deliver guys, I have no incentive to find someone else. I want to build deep trusting relationships with one or two groups where there are a lot of symbiotic relationships and drive them hard..