What should I consider first, and why?
Setting up a Reseller Program for my software product.
or
Setting up an Affiliate Network for my software product.
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Affiliate programs are easier to setup, so on that basis, you could start with that so you are ready quicker. Having said that, affiliate and resellers are not mutually exclusive, so you could have both. If you want full control, then affiliate is the way to go because your partners are "just" linking to your site and you (or your site) do the sales pitch, billing and customer support. With a reseller program, you trust the partner to run their own marketing targeted to their customer base, do the billing and the support themselves. This might mean you have less customer management to do as your clients are the reseller. For every reseller you have to manage, they have to manage xx clients, so it scales well. Consider the following example: 10 resellers, each selling 50 licenses of your software. That's 500 sales, but only 10 relationships to maintain. 10 affiliates, each linking to your site with 50 sales. It's still 500 sales, but you have made those sales, so you have 500 relationships to maintain. So in summary, with an affiliate program you own the relationship with the client and it is quicker to setup, whereas with a reseller program your reseller partner owns the relationship and it will take more time to setup but scales more. |
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There are resellers, and there are resellers. A lot of companies call themselves resellers, but they're just glorified product catalogs. Good examples are Zones, Software House International, and Programmer's Paradise. These are useless -- they don't sell for you, but just take orders from their customers. I've sold (literally) millions of $ of software through them without an agreement, without a discount, and never once did they do the selling. If you find a true reseller, this means either:
In those cases it can be very useful, especially in other countries where timezones, language, and culture make it difficult for you to do good customer support anyway. A good way to know you have a reseller and not a catalog is that they agree to monthly minimums on orders. I like affiliate programs too. Really they're like the "outside sales" option, just less formal. They're spread out to more people, who each individually do less work for you, but that's OK. Caution on the affiliates: There are lots of black-hat websites that will try to sell your stuff through the affiliate program. This hurts your Google rank (because you're linked from an evil site) and possibly your brand credibility. That problem is fixed by being choosy with who's an affiliate. Note that you don't have to pick! Affiliates and Resellers can be done at the same time. |
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Be careful about affiliate programs and consult with your attorney before you set one up. Having affiliates in different tax jurisdictions than you may be enough to establish a presence in that tax jurisdiction and you may be on the hook for collecting, reporting and paying sales tax for online sales made to customers within that tax jurisdiction. Each state/country has its own laws concerning this, so please get good information from your attorney so you can make informed decisions. -------------------D-I-S-C-L-A-I-M-E-R------------------ No attorney-client relationship has been created by this reply. |
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