Affiliate vs Reseller Agreements
Updated: 5 December 2019
Need some help selling your product?
Well, you can choose from affiliates and resellers.
Read on to learn the difference and what to cover in your agreements.
What’s the difference between affiliates and resellers?
Affiliates are typically involved in the pre-sale stage while resellers usually have a more holistic role from pre-sale to after sales support.
Affiliates get paid based on a performance based arrangement while resellers usually purchase your product and keep the profit margin on the products sold.
If affiliates drive visitors to your website, you might pay them per click (PPC).
And, if the visitors purchase your product, you may further reward the affiliate with extra commission.
So here are the key ways you can work with affiliates:
- Selling your product online
- Pay per click to your website
- Pay extra per sale transaction
Here’s what’s usually covered in an affiliate agreement:
- Promotional materials
- Affiliate tracking methods
- Program details - affiliate incentives
- Payment details - when affiliate will be paid
- Affiliate obligations
- Payment terms
- Intellectual property
A reseller purchases your software/product to resell it to others and make a profit margin.
Unlike the affiliates which are usually more involved in the pre-sales interaction i.e. driving traffic to your website, resellers may also speak to your end-users, resolve their queries, answer phone calls, take care of invoicing and offer after sales support.
Here’s what’s usually covered in a reseller agreement:
- Tools that you are providing the reseller
- Relationship of the reseller to you - usually to clarify that the reseller is a contractor and not an employee if this is truly the case
- Reseller obligations
- Training - may cover training for the reseller or end user training
- Product support - end user support
- No modifications - a warning to the reseller not to modify your products
- Payment - how you will pay the reseller
- Intellectual property
- Marketing activities
- Dispute resolution.
If you’re unsure which to use, ask yourself if you would like to a) reward your sellers for pre-sale marketing efforts (driving clicks to your website) or b) have your resellers purchase your product, and re-sell and keep profits.
Finally, if you are still in doubt, it helps to get some advice.
Got any questions or comments? Leave them below.
I wish you every success in your ventures!