SaaS Reseller Contracts

I’m getting an increasing number of requests to help with SaaS reseller contracts.

Which kind of makes sense. Just because you are online doesn’t mean that your ideal customer knows that you are there. And just because you know your home territory well, doesn’t mean that you’ll know the ins and outs of all the markets around the world. If you are a SaaS vendor, engaging a reseller for a specific territory is a way of getting market knowledge and creating greater visibility in that market.

There are two main ways that SaaS resellers operate.

The first is not reselling at all. In this scenario, the reseller finds the customers and then acts as an introducer. The customer signs a contract with the SaaS vendor, not the reseller, and the reseller gets paid (essentially an introduction fee) by the SaaS vendor.

The second way is by being an actual reseller. The customer signs a contract with the reseller, and pays the reseller. The reseller signs a contract with the SaaS vendor and pays the SaaS vendor.

It’s an odd construct in my view (a bit like eating in a restaurant and finding the food, cooking staff and tables are being provided by Party A, whereas the waiters are provided by Party B), but it works.

If you are a SaaS vendor, the thing you should be thinking about, other than increasing your customer base and getting paid by the reseller, is the impact on your reputation. If the reseller mis-sells, or provides poor account management, it’s your reputation that is going to suffer.

If you are a SaaS reseller (actual reseller, not introducer), then you should be looking to agree with the SaaS vendor a set of SaaS terms on which you can base your contracts with your customers: things like uptime, support, ownership of data. You will also want some governance arrangements (you will effectively be representing a number of customers vis-à-vis the SaaS vendor) and some levers to make sure your customers are looked after (aka service credits).

25 June 2024