
White label opportunities for a solopreneur? - noratrace
I have a successful SaaS product and it has attracted a few businesses wanting to work with me on a white label opportunity.<p>Essentially, they want me to launch the same service branded for them (data, customers, servers, etc are mine, but the branding is theirs) but sharing the profits (they do the marketing, etc).<p>Is this wise? What kind of revenue split is normal for these kind of arrangements?
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hcho
I wouldn't touch profit sharing with a 10 foot pole. You'd be surprised by how
creative they can get at inflating expenses.

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aquark
A lot depends on the detail of their definition of 'white label'.

Do they want just a version of the product that has their branding front and
center, but which with even a cursory scratching of the surface is your
product.

Or do they want a complete white-label version including domain names (incl.
backend services not shown in the browser), email, payment processing, etc,
etc.

In the later case unless they are willing to pay $$$$$ up front for the
development it would seem very unlikely to be worthwhile.

In the former case, you could decide if it is worthwhile for a moderate amount
of development effort and perhaps even include a 'Powered by ...' link in the
footer. Then offer them a 30% discount on pricing: eg. a plan that costs
$300\year normally you'll sell them for $210 and require they market it at a
price of at least $300 ... if they can sell it for more and capture more
profit take that as a signal to raise your prices!

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codegeek
Offer a reseller program.

1\. They sign a Non-compete agreement to ensure they don't become your
competitor. Get a lawyer involved to protect yourself.

2\. They pay a huge upfront fee. Call it "licensing" or "new reseller" fee. If
they dont agree, move on. This fee should cover at least 12-18 months of
average profit you make per client generally.

3\. On top of the fixed one time fee, they pay you a flat fee per customer
that they onboard. This could be harder to verify so the upfront fee should be
your minimum guarantee.

Generally profit sharing sounds great on paper but you wont be able to track
those metrics unless you are the one who hosts the software.

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grizzles
Hard to say. It's a complex decision based on your company's specifics. If you
do it, I'd suggest you strongly consider charging them a largish upfront fee,
like a licensing or franchising fee. Otherwise you risk bootstrapping a
competitor without any compensation for that risk. Revenue split for affiliate
deals (that's close to what this is) is often a function of base price +
margin - customer acquistion costs. Kind of like how Apple lets retailers sell
Macbooks for price X but no lower. So affilates can charge any amount above a
profitable floor that you have set.

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hluska
If everything goes to hell, can you afford a long court battle against your
partner? If the answer is no, don't even think of doing it - joint ventures
like this have a peculiar tendency to become non profits. If the answer is yes
and if they are willing to make a large cash payment up front (to compensate
you for your time), make sure to get very clear terms around what expenses are
allowed to be charged to the joint account.

