Why Reseller Partnerships Fail

Why Reseller Partnerships Fail

Entering into a reseller partnership is easy; an agreement between two companies is signed. The reseller wants to increase the breadth of its portfolio and the vendor wants to increase its sales. The challenge is that even though the new agreement is in place, 80%+ of the reseller’s revenue is most likely coming from five products (or less), which their sales force already knows how to sell. Consequently, the vendor must be highly focused on becoming part of the reseller’s internal sales process. Otherwise, their chance of success is substantially decreased.

The context: Most resellers have 30 products in their portfolio. However, the reality is that they actively market and sell only a small number of those products to their customers. This is because five of the 30 products (or less) likely accounts for 80%+ of their revenue. For a new vendor to become successful with the reseller, they must either displace one of the top five selling products or become the six strategic product (strategic products are mentioned in every engagement). Otherwise, the vendor will just become product number 31 in the reseller’s portfolio.

So, how can a new vendor fully integrate itself into a reseller’s internal sales process? The vendor must continually be a good partner by investing in the reseller’s success. This means ensuring that the reseller’s sales force knows how to sell the vendor’s product. “People sell what they know.” It also means helping them understand that by selling the vendor’s product, they will make more money. “If it does not make dollars, it does not make sense.” Finally, the vendor must “snap into” the reseller’s business, not alter it or make it more complex.

Know going in that results from reseller partnerships tend to be binary. That is, sales either increase dramatically for the vendor or not at all. When developing reseller partnerships, you are selling your company and yourself as much as you are selling your product. Help resellers overcome the risk of partnering with you (i.e., you will not adequately support them, you will subsequently go 100% direct, etc.). Resellers have a choice of vendors that they can partner with, make it easy for them to choose you.

All contents copyright © 2013, Josh Lowry. All rights reserved.

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