
Ask HN: How should I negotiate channel sales? - throwaway2608
 Hey guys.
I’m a freelancer with focus on SAP and I work for major companies where I saw the same problem again and again. For more than a year I solo-developed a solution for the B2B market and eventually I reached a state which I think is ready to be sold. There are no direct competitors but still it will be difficult to sell since the solution runs on premise and requires integrations with other systems. The B2B market is anyway difficult so I think this will be the critical point in the whole game. As a solo developer I see basically no chance to do it alone.<p>When I talked about it with a friend who I trust and who works in sales, he told me that he could sell my solution as part of their company which is an established hosting company in the B2B market. After I presented the solution to his CEO he also confirmed that they are definitely interested but of course we need to be clear and have a contract where we define the conditions. For example, he mentioned getting the exclusive rights to sell the solution in my country. They would not only sell the solution but could also offer a service desk, hosting etc. I see it as a win-win situation because I could continue focusing on the technical part (which I love to do) and they can offer an innovative solution that might be the entry point to new customers who they could sell their hosting to.<p>Next time, they asked to define the conditions in detail. I’m not a negotiation expert and do not know how to approach this. Thus I would love to hear your opinion or your experiences:<p>- How do channel sales contracts look like in general?<p>- Which model to share the revenue would you recommend? Absolute or relative? The pricing model will most likely be based on active users plus a base fee.<p>- What are the points I should insist on?<p>Thanks a lot!
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quaquaqua1
Congrats! You'be created a solution that seems to be viable, if we are to
trust the skills of the people you pitched.

The first step is to get a lawyer. The lawyer needs to tell you if you need a
business entity. You are dealing with a piece of intellectual property. You
don't want them to steal it, modify it, and cut you out of the equation
without paying you. If they do that, the contract needs to be clear so that
when you sue them, the judge can clearly see how they violated your agreement.

Another option is to sell them the rights to the software for a lump sum
payout right now, of monthly payments etc etc etc. This would of course be
easier but less profitable.

Another thing to consider is the time duration of the contract. You don't want
to give them rights forever-- what happens if they have exclusive rights and
they don't sell anything because they are incompetent or lazy? Now you can't
sell your own product either, and you make no money.

You hold all the power in this situation :) Send me an email if you need more
help and I'd be happy to chat more.

waybetterthansaas@gmail.com

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throwaway2608
Thanks a lot for your response! Those were absolute valid points.

I thought about dictating the price the solution should cost and then share
the revenues (something like 75% for me and 25% for them). Of course I would
discuss the initial price with the partner but in this way I would properly
participate in the revenues especially since the pricing is quite unclear at
the moment.

Also, from a legal point of view: who would close the contract with the
customer eventually? Is it the partner or me?

