If you’re setting up a channel partner program, it’s crucial to have an agreement in place that includes the right terms and structure for the various relationships. This is not a one-size-fits-all situation. The type of partnership will dictate the specifics and structure of these agreements. Each type of partnership comes with its own set of considerations.
Here are the most common:
- Resellers: These partners usually purchase products at a discount and resell them at a markup. The agreement should cover pricing, discounts, inventory management, and branding guidelines, to name a few. Reseller agreements often include minimum purchase requirements and marketing commitments.
- VAR (Value-Added Reseller): VARs resell your product with added services or enhancements, providing additional value to the end customer. The agreement should specify how the value-added services are defined, pricing, support obligations, and the division of responsibilities between the VAR and the original provider.
- Referral Partners: Referral partners introduce your products or services to potential customers in exchange for a commission on any resulting sales. A few terms that should be included in the agreement are the commission structure, payment terms and the process for tracking and attributing referrals.
- Affiliates: Affiliates promote your products or services online and earn commissions for sales generated through their unique affiliate links. The agreement should outline the commission rate, payment terms, and compliance with your brand guidelines. It’s also essential to define the rules around advertising methods and the use of intellectual property.
- Independent Software Vendors (ISVs): ISV’s develop and sell software products that can be integrated with or complement other solutions. When partnering with ISVs, it’s crucial to establish a comprehensive agreement that outlines the scope of collaboration, integration and compatibility, intellectual property rights, support and maintenance, data security and privacy, marketing and co-branding and revenue sharing, to name a few. The agreement should detail how the software will be integrated, supported, and marketed, as well as define the responsibilities for each party regarding updates, maintenance, and customer support. Additionally, it’s essential to address data security and privacy concerns, especially if sensitive customer information will be handled.
In addition to having the right terms, it’s essential to have the right structure – easy to manage and get signed (with little to no changes)! If you need help thinking through your channel partner program or reviewing your existing agreements, reach out today!
Tricia Meyer is a serial entrepreneur, business lawyer and mom of 6! Tricia is the Founder + Managing Attorney at business law firm, Meyer Law and Co-Founder at The Clever Baby. At Meyer Law, Tricia has helped thousands of companies from startups on Shark Tank to growing companies on the Inc.500 list to some of the largest, well-known companies in the world! The Clever Baby recently launched its first product Jet – a patented, innovative teether and dispenser all-in-one, and is committed to developing clever products for parents and creating magical moments for babies and kids. Tricia is passionate about entrepreneurship and has mentored thousands of companies at incubators and accelerators across the United States at 1871, TechStars, WeWork Labs, and more!
