on June 02, 2018 Financial Operations

Questions You Need to Answer about SaaS Reseller and Partner Channel Agreements

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As your SaaS business grows, you’re going to expand the various ways you sell and market your product. Tapping into new customers through resellers and channel partners is one option many businesses will choose, but as we see at SaaSOptics, businesses often struggle to define reseller or channel partner arrangements and financial reporting because there are multiple ways to do so.

Just as your business operates in many unique ways, reseller and channel relationships often vary widely from one company (and partner) to the next – and that’s to be expected.

But before you sign on the dotted line or structure your financial reporting, take a moment to ask yourself a few important questions.

Here are the high-level questions you should consider for your reseller/channel arrangements.

  • Where do you want to do revenue recognition?
  • Do you want to recognize revenue at the reseller/channel partner level or at the end user level?
  • Who gets the invoice: The reseller/channel partner, the end user or a combo of both?
  • How do you plan to track and/or amortize any expenses related to reseller and channel partner commissions/royalties?
  • Where do you want to track your subscription metrics?
  • How will you calculate churn at the reseller or end-user level (or both)? How about subscription momentum? How about CLV?
  • Do you want to segment your resellers/channel partners to slice and dice your report output by partner or partner group?

These are four of the most common reseller/channel scenarios that we see at SaaSOptics with our customers.

 SaaSResellerScenarios-01

If you want a printable version of the info sheet above or if you'd like an easy-to-share file, here's a downloadable version of the reseller scenario guide.

Download the PDF