SaaS (Software as a Service) reselling is a popular business model that allows third-party vendors to sell cloud-based software to their customers. These resellers typically earn commissions or margins based on their sales. Various types of SaaS resellers exist, each with its own approach to delivering value to customers and partnering with software providers. Below, we break down the most common SaaS reseller types.
1. White-Label Resellers
White-label resellers offer SaaS products under their brand, giving the impression that the software is their creation. The end customer usually has no idea that the SaaS solution originates from a third-party provider.
- Example: A company might sell a customer relationship management (CRM) tool, branded with its logo and identity, even though it was originally developed by another vendor.
- Benefit: Resellers can build brand loyalty while offering established SaaS solutions.
2. Referral Partners
Referral partners neither explicitly market SaaS products. Rather, they advise prospective clients of the program and are paid a fee should the referral result in a sale or subscription. They handle neither customer service nor billing.
- Example: A consultant may suggest a specific cloud-based accounting tool to their clients and receive a referral fee if those clients sign up.
- Benefit: Minimal involvement, as the SaaS provider handles everything post-referral.
3. Value-Added Resellers (VARs)
Value-added resellers provide more than just a SaaS good. Additional services like custom integrations, support, or even new features catered to customer demands help to improve the program.
- Example: A technology firm might sell an enterprise resource planning (ERP) system, adding custom development and continuous support services to make the product more appealing to specific customers.
- Benefit: By offering customized services alongside the SaaS product, VARs can charge higher prices and increase their profit margins.
4. Managed Service Providers (MSPs)
MSPs go beyond simple reselling by managing the SaaS solutions for their clients. They handle everything from software deployment to maintenance and technical support.
- Example: An MSP could take charge of a company’s entire cloud software infrastructure, including email, security, and collaboration tools.
- Benefit: Steady, recurring revenue from ongoing service agreements.
5. Affiliate Partners
Affiliate partners typically promote SaaS products through online channels such as blogs, social media, or email marketing. They earn commissions on any sales or sign-ups that come from their unique affiliate links but have no further role in the transaction.
- Example: A blogger writing reviews of various software tools might include affiliate links to products like project management software. They get paid for each sale that comes through their link.
- Benefit: The affiliate model requires minimal effort beyond promotion, as the SaaS provider handles the entire customer relationship.
6. Distributor Resellers
These resellers work through distributors who have established partnerships with multiple SaaS vendors. Distributors provide access to a range of software products, which the reseller can then offer to their customers.
- Example: A reseller might have access to a portfolio of cloud-based productivity tools, security applications, and business management solutions through a distribution platform.
- Benefit: The reseller can offer a broad range of products without needing direct relationships with each vendor.
7. Hybrid Resellers
Hybrid resellers use a combination of different models, blending referral, white-label, or value-added approaches. They might handle certain software products as a VAR while acting as a referral partner for others.
- Example: A hybrid reseller could offer white-labeled customer support software while simultaneously referring clients to a SaaS solution for cybersecurity.
- Benefit: Greater flexibility, allowing the reseller to adapt based on product or client needs.
8. Marketplace Resellers
On well-known online markets like Microsoft AppSource or AWS Marketplace, marketplace resellers sell SaaS products. Many times featuring several software solutions, these systems let the reseller present several goods to possible clients.
- Example: A marketplace reseller may list various SaaS products for business productivity, offering customers the ability to browse and buy directly through an online portal.
- Benefit: Access to a larger customer base through high-traffic marketplaces without the need to build independent sales channels.
9. Consultant Resellers
Consultant resellers take a strategic approach by offering consulting services in addition to recommending SaaS products. These resellers may either earn referral fees or charge for their expert advice while recommending software solutions that meet client needs.
- Example: A business consultant who specializes in operational efficiency might recommend a suite of SaaS tools tailored to a client’s workflow and earn a fee for their service.
- Benefit: The ability to combine expertise with software sales increases the potential for larger, more profitable projects.
10. Co-Branded Resellers
Under this approach, the SaaS provider and the reseller share the brand of the product. Although the SaaS vendor’s name is obvious, the reseller also includes its branding, therefore guaranteeing dual engagement for clients.
- Example: A company might offer co-branded collaboration software, with both its logo and the SaaS vendor’s visible on the product interface.
- Benefit: Combines the credibility of the original vendor with the reseller’s brand, giving clients confidence in both the product and the reseller’s involvement.
Conclusion
For companies wishing to join the cloud software market, SaaS reselling has many prospects. There is a reseller model to suit every approach whether your preferred approach is the more thorough engagement of value-added or managed services or the hands-off approach of referral relationships. Knowing the subtleties of every type will enable you to choose the optimal strategy for your company, therefore optimizing your value to clients and income potential.