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How to start reselling software

International software and SAAS companies have built very large sales and marketing teams to commercialise their software. Fueled with millions of dollars, those teams are very effective at their work but most software are not deployed in an organisation without a little bit of help. This is where your role starts, very often rely on your expertise and your advice to the customer in order to place their products and or deliver them.

In return, they will also help you find new customers, by sending you the ones who go directly to them and request for services. This generates a steady service revenue stream for you however in most cases, you will not get any revenue from placing their products, unless you get equipped for it.

You might wonder if you could be compensated for your efforts and the energy you put in sourcing and deploying those solutions when the sales team in their business receives compensation for the same work.

If you want to join this elite group of people being compensated for placing those solutions, one option is to become a software reseller.

Not sure if this is the right business path for you? Keep reading to learn how you can start making money as a reseller today.

What is a software reseller and what does he do?

Whether they’re a product, service or in our case a software, the basic job of any reseller is to buy a product at a discounted price and find customers interested in acquiring it and getting him onboard.

A software reseller essence is his capacity to find the right customer for the selected product, he may work as an individual or a business. It may be a dedicated business or in your case it might be a related business. They buy from distributors or, sometimes directly from the provider then sell those products directly to the end customer, in our case today generally a company.

Reselling software can be very lucrative. But, it can also be more difficult than selling services. The cycle of sales and the expectations from your customers are different, you also need to consider the services you will need to provide which are generally attached to the licenses or expected from your customer. Those services can range from placing the product, invoicing, and collection but also delivering support to the customer past the initial project and throughout the life cycle of your customer and ensuring the customer succeeds using the product.

Resellers and Distributors what is the difference

When you’re looking for information on reselling software, a lot of information also comes up about working as a software distributor. Is there any difference between these two options?

Some basic differences between resellers and distributors include:

  • Distributors tend to have closer relationships with provider and transact larger volume
  • Distributors will provide a larger range of services and will generally also provide services related marketing, white labeling, or branding
  • Distributors take inventory of a product and have commitment on targets, while resellers typically work on a more adhoc basis and engage into lighter commitment
  • Resellers usually act strictly as a middle-man between customers and manufacturers. In some cases, resellers do ensure collection of the money but the service expectations are lower.

Because there is a little more risk for the provider, distributors typically do more work with established businesses and larger companies who have the need for larger infrastructure to support their customers.

Finally, distributors will very often manage a network of resellers and will act as a middle man between the provider and the network they have developed, they will also offer a larger range of products from various providers where a reseller typically focuses on one product at a time per agreement.

How to resell a software

There are a number of different ways that a consulting firm or independent contractor can work with a distributor to increase their revenue.

Some common methods include:

  • Reselling software as is, with original branding and a resale license
  • Re-branding (adding the customer’s logo or other information to the package and documentation)
  • Licensing the original source code so customers can make their own modifications
  • Customising software for each customer
  • Some software providers also create affiliate programs as part of the resale process easier and offer a one off referral fee.

The amount of money that resellers pay for the software varies depending on the specific package and services delivered around the solution and finally the volume they are able to place on an annual basis.

If they’re selling a low-priced online package, for example, they may just make a one-time payment for the software and resale rights. But, they sometimes pay a percentage per sale or a portion of the royalties from the software.

Where should I start ?

Of course, the process of becoming a software reseller is more complicated than just buying and selling. There are certain legal and service level obligations that you must also meet.

Follow these steps to make sure you’re all set to do business as a software reseller.

File for company registration

The first thing you’ll need to do is reach out to your country’s company registration body and file for a company registration or if you are a business simply use your existing company registration. It is however advised to update your company services in the national registry to best reflect your new activity.

In some cases or countries a license for reselling is required, it is the case in some starters in the USA. You should check any legal license requirements before starting.

Select the right product for your customers

To succeed in your new business you will need to have the right product for your customer, it is essential to select the right mix of solutions that will address your customer base needs. You can have the longest list of products or the best product to resell but if they do not fit your customers you will never be able to sell them.

Ensure that you have the skills in your business to deliver the services around the solution you are placing as well, to ensure you deliver happy customers which is the ultimate must have for your business.

Build relationships with your providers

As any business, you will not be granted a white card to start selling straight away. Companies providing software have limited bandwidth to manage resellers and they are picking the right business to work with. In this business as in many other building strong relationships that drive trust and enable business is key to developing this new business.

In addition to this, all companies have developed different ways to manage and compensate their resellers.

Check that you have the necessary scale

Building your reseller business involves setting up a minimum set of services which has a cost, building an expertise in running sales cycle , building a team, sometimes advertising as well. In addition to that the revenue you will generate depends on the volume of sales you will do. Finally there is your time, all the time spent in setting up this dedicated business does not go into your service business.

Once you factor all those costs, you might consider going through an aggregator like Platinum Partner or dealing with a distributor directly who will alleviate some of those costs and simplify the process for you.

Start now

After this, you should be all set to purchase the software and start selling, either from your store or on your website.

Remember to collect sales tax from the people who purchase the software, as they’re the end users. But, you aren’t required to collect sales tax from buyers who live outside your state or country..

Bonus Tips

These bonus sales tips will help you get off on the right foot and make sure you succeed as a software reseller.

Use Your Expertise

You presumably got into software reselling because you know something about software development and programming. Use that knowledge to help you make sales.

You may also be able to make yourself more valuable by helping customers set up their new software or making changes to customize it for them.

These kinds of services take a load of the developer, as well, and increases the chances that they will want to keep working with you.

Focus on Customer Service

Good customer service is essential, no matter what you’re selling.

Some practices that will set you apart from other retailers include:

  • Placing the right solution to the right customer
  • Quick responses to emails or calls before and after the sale
  • Providing accurate descriptions of the products

This might seem like a disservice to your bottom line. In reality, though, it will boost your customer service ratings and may lead to increased profits later on.

Start your new revenue stream today

Are you ready to become a software reseller?

Keep these tips in mind as you get started and you’ll be well on your way to a fruitful career.

Need help finding software at wholesale prices? Don’t forget to check out our list of products and solutions

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