Question

Topic: Strategy

The Ins And Outs Of A Reseller Program?

Posted by Anonymous on 2/6/2004 at 2:48 PM ET 250 Points
Working jointly as the creative director and marketing coordinator for my current employer, I'm in charge of all marketing efforts for our flagship product, an online biz management system for network marketing companies.

Here's the low-down: We've started plans for a reseller program to allow other companies, e.g. non-competitor companies that sell products and services to network marketing companies, to resell our product and make a residual commission in the process. We've signed on a couple local resellers as a test of sorts, one of which has already brought us two new clients.

What are the pros and cons of a reseller program? What pitfalls should I avoid? Etc.
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RESPONSES

  • Posted by Blaine Wilkerson on 2/6/2004 at 3:09 PM Accepted
    Interesting subject...

    Reseller programs are quite useful and lucrative when monitored approriately.

    Pros:

    1. You have a "free" (aside from commission) sales force to expose and market your product.

    2. Expands your network within your industry which aids in future implictaions and introductions of new products.

    3. Allows you to focus on "other" activities including product enhancements and future developments.

    4. Increases revenue without having to do all the work yourself.

    Cons:

    1. Possible mis-representation of your product by the reseller.

    2. Possible pirating of the product for their own use.

    3. Possible hacking of resellers' sites where others may pirate the product.

    4. All of the above could result in a negative "reputaion" of your branding and capabilities.

    Pitfalls:

    Generally, careful screening of a reseller can prevent many problems.

    Review there website and/or store to make sure it is the kind of place you want your product to be sold.

    Inquire about how the reseller plans on preventing hacking ( i.e. secure servers etc.).

    Devise a service agreement with a NDA and specific rules of engagement...particularly with regards to priating and copyright violations.

    Avise the resellers who your competitors are so they will not inadvertantly approach them.

    Set a list of approved sales tactics ( i.e. no spam, or standing on the side of the road in a chicken suit etc).

    If security is an issue, I would make sure you host the access to the product on your own servers and track the distribution via your affiliate/resell program to prevent fraud etc.

    Hope that helps!
  • Posted by ReadCopy on 2/6/2004 at 4:47 PM Member
    See if this helps:
    https://www.bizjournals.com/seattle/stories/2000/10/23/focus14.html?page=1
  • Posted by ReadCopy on 2/6/2004 at 4:58 PM Member
    I liked this too: https://www.biz-community.com/Article/196/11/1358.html
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