
Ask HN: What terms are best for a reseller of SaaS? - equilibrium
I have reached out to a startup in hopes of forming some sort of partnership&#x2F;becoming a reseller. Our initial 90 minute conversation went very well. I would be able to reach markets that they would have difficulty in do, due to various connections I have established as well as barriers of language, culture and geography.The ball is in my court and they have asked that I propose something on how we can collaborate i.e financial structure. What kind of agreement that wouldn&#x27;t come off as too aggressive that would help us both arrive to a win-win solution. They&#x27;re priced as a SaaS.
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davismwfl
To be realistic you both need to have a real understanding of at least the
cost of acquisition today and lifetime value for a client (including time
period). If you are just acting as a sales rep for them essentially and they
own and manage the customer after you get the customer signed up, then that is
different then if you own the customer and the support. If language and
culture are an issue, then likely you'd own the support and so the cost should
be an on-going cost.

The most common method for referrals is typically a one time payment but then
the SaaS company owns the client and all support. For this they will want to
keep the CoA to a point they can make money over the life of the client. You
need to understand the current pricing for clients to know how to price this
fairly. Hard to give you much of an idea, but I have seen for large enterprise
style agreements where the referral payment is equal to 1-3 months of service
or when values are smaller, 1 year of service. It is so dependent on type of
customer and LTV etc that it is hard to be general.

Second option is if you own the customer because of support etc, then you
would have on-going costs and so typically a percentage of revenue is more
fair for the life of the customer. This is almost more like a reseller's
agreement than a referral/sales agreement.

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codegeek
Are you going to do a one time sell based on your contact and then move on
from that client or will you be the one doing customer support and maintenance
going forward ? If the former, then ask for a percentage of the sale for say
first 12 months. If latter, then the SAAS company could charge you a
subsidized price and you add your own markup to sell to your client.

I run a SAAS company and thinking about introducing a reseller program so this
is an interesting topic for me as well. As a SAAS founder, I would love to
connect with resellers and if they just want to send us clients after initial
demo and sell, I don't mind giving up to 30% of the recurring revenue for
first 12 months.

But you need to think about the legalities as well and some other stuff like
will you have access to the SAAS directly that you can install/host yourself
or will it be installed/hosted for you per client etc ?

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brudgers
_What kind of agreement that wouldn 't come off as too aggressive_

In business to business, nobody gets offended when someone else expects to be
paid (except people who don't plan to pay, but that's another story or two).
In B2B the price is the price. Figure out what you need to charge to make
enough money to make it worth your while in the long run. That's actually easy
enough to be done in a few hours. Spending time coming up with the perfect
price for a one off deal is a waste of time. It's a way of avoiding rejection.
Throw a number at it. If it's in the ballpark the deal will move forward. If
it's not in the ballpark, plus or minus fifty percent won't make a difference.
Good luck.

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jahn716
Like are you going to create another entity in order to do this? Or are you
planning to act more in a sales/contractor/referral capacity?

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equilibrium
As a start, the latter of the two options you mentioned.Any insights on the
best way to go about that?

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akfaew
Affiliate marketers usually get 30%.

