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Reseller Pricing: Models, Margins & How It Works
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How Reseller Pricing Works “Reseller pricing is a chain that starts at the vendor's list price and ends at what the end customer pays.” There are two structures. In direct pricing the vendor sells straight to the reseller. In two-tier pricing the vendor sells to a distributor, who sells to the reseller, and the wholesale distributor takes its own cut, typically 3 to 7% (Chanimal). Deal registration can add extra discount on a deal the reseller brings in, which protects the partner that did the work.
How Reseller Pricing Works “In order: the vendor sets a list price, the partner gets a discount (usually set by partner tier, volume, or contract terms), the discounted price is what the reseller pays to buy, and the reseller then sets its own end customer price.” There are two structures. In direct pricing the vendor sells straight to the reseller. In two-tier pricing the vendor sells to a distributor, who sells to the reseller, and the wholesale distributor takes its own cut, typically 3 to 7% (Chanimal). Deal registration can add extra discount on a deal the reseller brings in, which protects the partner that did the work.
How Reseller Pricing Works “The reseller's gross profit is the spread between the buy price and the end customer price.” There are two structures. In direct pricing the vendor sells straight to the reseller. In two-tier pricing the vendor sells to a distributor, who sells to the reseller, and the wholesale distributor takes its own cut, typically 3 to 7% (Chanimal). Deal registration can add extra discount on a deal the reseller brings in, which protects the partner that did the work.
Reseller pricing is a chain that starts at the vendor's list price and ends at what the end customer pays. In order: the vendor sets a list price, the partner gets a discount (usually set by partner tier, volume, or contract terms), the discounted price is what the reseller pays to buy, and the reseller then sets its own end customer price. The reseller's gross profit is the spread between the buy price and the end customer price. “In two-tier pricing the vendor sells to a distributor, who sells to the reseller, and the wholesale distributor takes its own cut, typically 3 to 7% (Chanimal).” How the discount is structured matters as much as its size. See the static and dynamic pricing models for the two main approaches, and set deeper discounts for partners who earn them through partner tiering and 4C qualification.