What is a reseller of software?

Software resellers sell products that they don't manufacture or develop themselves. They can be distributors or VARs (value added resellers), but generally speaking, most people will refer to them as "software resellers" since this term has become synonymous with the industry.

In short, if you're selling any type of product that isn't your own -- whether it's hardware, services, or software -- then you need to be classified as a reseller. If you want to learn about the basics of becoming one, keep reading below!

What is difference between distributor and reseller?

Distributors distribute products from manufacturers. Resellers buy wholesale goods from manufacturers, package them up for sale, and then resell those packages to customers. Distributing vs. reselling is like comparing apples to oranges; both have their place depending on the situation, so let's break down these two roles further.

The first distinction comes when buying things at retail stores versus online retailers. You might go into an electronics store where there are rows upon rows of TVs and laptops sitting side by side. The salesperson walks around you and explains all of the features of each device before you make a decision. In contrast, if you visit an Amazon website, you'll see a single page listing hundreds of devices available for purchase. This makes it much easier to compare prices across brands, models, and specs.

This same concept applies to physical vs. digital items too. A retailer may carry something new in its inventory that hasn't been released yet; you could call them a distributor because they'll likely take some time getting the item out to market. However, once the item hits shelves, the retailer becomes a reseller because they've already sold it to consumers who now have access to it. For example, consider the case of Apple Stores. While many believe that Apple manufactures iPhones, iPads, Macbooks, etc., Apple actually does not directly produce any of these products. Instead, Apple sells them through third parties called authorized dealers. These dealers create the packaging, configure the computers, install apps, and provide support for the final products. When you walk into an Apple Store, the staff won't know anything about the computer itself; instead, they'll help you order the right accessories based on your needs. Similarly, Microsoft doesn't make Xbox consoles either; rather, they contract with gaming companies like Sony and Nintendo to build these machines. Once the console launches, however, Microsoft works closely with game developers and publishers to ensure that the games work well with the system.

These distinctions apply equally to software distribution channels. For instance, say you have a friend who manages IT operations for a small company. She often brings her laptop over to your house to show off cool gadgets she found while browsing the web. One day, she shows you the latest version of Google Chrome installed on her machine. What happens next depends on which role she plays:

If she's a distributor, she probably came across the app after purchasing it from Google Play or iTunes. After downloading the installer file, she had to run it manually from within Windows Explorer. Now that you understand how distributors work, here's why software resellers exist.

Why do software resellers exist?

Reselling is a lucrative way to earn money. As we mentioned earlier, distributors often stock certain products and wait until they hit shelves. Then, when someone buys that particular item, the seller gets paid regardless of whether the customer decides to return it. With reselling though, the price you charge for a given license will depend on several factors, such as demand, competition, and supply.

When it comes to pricing, remember that everyone else can get away with charging whatever they want because no one cares about competing on price. But when you're working with a large enterprise client, pricing matters. Your goal should always be to maximize revenue per unit sold. To achieve this, you can offer discounts on volume purchases, bundle multiple licenses together, and even pay licensing fees upfront to reduce cash flow risk.

You also need to think carefully about the types of deals you enter into with clients. First, you'll want to establish minimum quantities needed to justify paying a fee. Next, determine how long the deal lasts and what options your client has if he wants to extend the agreement beyond its initial length. Finally, ask yourself what terms you'd prefer to negotiate. Would you accept fixed monthly payments or would you rather receive royalties every month? And finally, do you require payment up front or would you rather put the funds toward other projects?

Finally, you can increase profitability by offering additional services alongside software licenses. Perhaps you can add consulting hours to existing contracts, give free training classes, or offer remote tech support. Again, this boils down to maximizing profits, which means taking advantage of extra revenues whenever possible.

Why do software companies use resellers?

One reason that software companies choose to hire software resellers is simply due to convenience. By outsourcing the process of finding and managing partners, they save time and resources. Additionally, they can scale quickly without having to worry about building relationships with thousands of potential buyers.

Another benefit of using a channel partner is that businesses usually only have limited budgets. Thus, the number of vendors they can afford to approach is quite low. Even if a vendor accepts your proposal, there's still a chance that he won't end up signing a contract. It's better to start searching early than waiting for weeks to hear back.

Other advantages include being able to focus on core parts of the business and delegating administrative tasks. For example, if you're running a business that offers cloud storage solutions, you could employ a reseller to handle everything related to marketing, fulfillment, billing, and technical support. In addition, you wouldn't have to spend time trying to figure out how to integrate different systems or creating custom interfaces. Lastly, hiring a third party allows you to focus on growing your organization.

There are certainly drawbacks to partnering with resellers, however. Most notably, you'll lose control over pricing and quality assurance. Another downside is that resellers aren't subject to the same legal liabilities as traditional corporations. Still, if you're looking to grow rapidly, you'll likely find reselling to be beneficial.

What are the benefits of reselling?

Aside from the obvious perks of earning income without doing any actual work, reselling provides another set of benefits. Here are just a few ways that it can improve your bottom line:

It helps you reach new markets faster. Since resellers typically bring lots of contacts, they can introduce you to potential clients very fast. Moreover, since they speak fluent English, they can translate your message effectively.

It increases your brand awareness. Being associated with trusted names improves your reputation among your target audience. Plus, by leveraging the expertise of established suppliers, you gain credibility with clients.

It saves you money. Since they manage the entire process from search to signup, resellers can lower your costs significantly.

It expands your network. Working with a reputable reseller gives you access to many qualified prospects. Not only will they know the ins and outs of the industry, but they'll also have plenty of experience to share with you.

As you can see, there are numerous reasons why you'd want to become a reseller, but ultimately, it's really just a matter of choosing the best option for your specific business. Take some time to research various providers and pick the one that seems ideal for you. Once you decide, you'll be well on your way to launching a successful reselling operation!

Want to read more articles like this? Check out more posts in our Software Reseller category.

Are you looking for ways to make money from the cloud? Are you wondering if it's possible to sell your own products as an independent distributor or agency instead of using one of the many established third party services out there? If so, then this article will help answer that question by explaining exactly why it makes sense to become a reseller, and also give some real world examples along with a list of best practices when setting up a successful business selling IT solutions through reselling channels.

What is a technology reseller?

If you're new to the world of technology, then I'm sure you've heard about "cloud computing" before. It refers to storing data on remote servers rather than locally on desktop computers, laptops, tablets, etc. The idea behind cloud computing is simple - you can access all of your files remotely without having to worry about them being lost due to hard drive failure, theft, or other reasons. This means that everything is stored online somewhere, allowing you to work anywhere (even while traveling) and have all of your important documents accessible at any time.

This sounds great! But where does that leave businesses who don't have their own server infrastructure? What happens when they need something like emailing capabilities? Or maybe someone needs to print off a document but doesn't have an office printer? Well, thanks to cloud technologies, these problems aren't even issues anymore. You simply log into your favorite service provider website, select the item you'd like to purchase, and pay via credit card or PayPal account. Once payment has been confirmed, you'll receive your product immediately, usually within minutes.

So, now we know what cloud computing is, let's talk about technology resellers. These individuals either offer their own products under various brand names, or act as middlemen between customers and vendors. They connect buyers and sellers together, helping both parties save money and avoid unnecessary hassle. Resellers typically charge commissions based upon the volume of sales made, which varies depending on the type of product involved. For example, if a company sells 1 million dollars worth of computer equipment per year, then they may only earn 5% commission. However, if they sold 10 units last month, then they would likely get paid much higher percentage of their total sales.

The majority of resellers today specialize in offering IT solutions to small and medium sized businesses who cannot afford to hire full-time employees for technical support purposes. Instead, they turn to outsourcing options such as Microsoft 365, Office 365, Google Apps, Salesforce, Zendesk, Dropbox, Box, G Suite, and others. By doing so, they can cut costs and pass those savings onto customers in the form of lower prices. This allows SMBs to focus on growing their business instead of spending countless hours trying to figure out how to fix complex problems in their existing systems.

Why do you want to be a reseller?

As mentioned above, technology resells play an essential role in enabling smaller organizations to remain competitive and profitable. The most obvious benefit is cost saving. In addition, resellers often provide additional functionality and convenience features not available directly from vendors. These include things like 24/7 customer support, easy order fulfillment processes, free upgrades, cross-platform compatibility, and the ability to customize applications according to individual client requirements. In short, resellers can fill gaps left open by traditional vendors.

Another reason people choose to start their own technology reseller business involves the flexibility afforded to them regarding timing. Many entrepreneurs enjoy starting their own business because they feel they can better manage their schedules and lifestyles, especially during times when they might otherwise struggle to find extra cash flow to cover expenses. Additionally, resellers tend to have greater control over pricing since they set rates themselves. Finally, many independent distributors and agencies see increased job satisfaction knowing that they had part ownership in creating their own success story.

Finally, another common motivation among aspiring technology resellers is the opportunity to increase profits. Due to the nature of the industry itself, resellers often possess knowledge of certain products that could prove beneficial to clients. Some resellers may already know suppliers well enough to negotiate special deals for their customers, resulting in significant price reductions. Others might develop relationships with trusted partners across industries to bring unique items to market quickly and efficiently.

Why do tech companies use resellers?

It goes without saying that every single vendor wants to maximize profitability. That said, there are several different types of companies that rely on resellers to meet demands. Here's just a few of the biggest ones:

Software developers & publishers

These kinds of companies create software programs designed specifically for commercial enterprises. Because they're focused primarily on making profit, they generally prefer buying wholesale packages from large scale manufacturers rather than going through a direct channel.

System integrators & consultants

These firms assist companies seeking to implement new network infrastructures, hardware configurations, or operating system updates. Their expertise comes in handy when troubleshooting and fixing potential issues, thus reducing downtime and ensuring smooth operations.

VARs & MSPs

These businesses partner with local area networks to deploy custom software installations and maintenance agreements. Since VARs and MSPs have specialized skillsets, they often serve as go-to resources for companies dealing with a wide range of technological challenges.

IT contractors

While technically speaking a contractor isn't really considered a reseller, it's still a valid option for anyone hoping to break into the field. Contractors specialize in providing specific tasks related to information technology, including software installation, training, consulting, security audits, and similar activities.

How are resellers in tech?

Nowadays, there are many ways to enter the realm of technology reseller. One popular method is to buy stock from reputable dealers and resell it yourself. Another way to approach the field is to find a niche within a larger enterprise and build up a loyal base of satisfied customers willing to refer your name to friends and family members. A third possibility is to look outside of the United States and seek out international markets. While US laws prohibit foreign entities from owning American corporations outright, there are certainly instances where non-US subsidiaries operate independently with no ties to parent companies back home.

Regardless of how you decide to become a reseller, here's a list of tips to keep in mind once you begin working towards your goal.

1. Be realistic about what kind of income level you expect to achieve. Remember, it takes years of consistent effort to reach the point where you can comfortably live off of your earnings alone.

2. Become familiar with the legal aspects of running a business. There are numerous state regulations governing the sale of goods and services. Also, consult tax professionals to learn how taxes should be calculated.

3. Make sure you understand the importance of branding. Even though you won't be personally handling merchandise orders, your reputation becomes synonymous with the quality of the products you sell. Therefore, ensure that you always treat everyone fairly and ethically throughout each transaction.

4. Take advantage of marketing tools whenever possible. Use social media platforms to spread awareness about your business, and take advantage of SEO techniques to boost search engine rankings.

5. When considering whether to join forces with another entity, ask yourself questions like: Is my business strong enough to survive on its own? How long would it take me to grow my organization significantly? Could I handle multiple projects simultaneously? Would I require ongoing assistance? Do I foresee myself becoming too busy to maintain my current lifestyle?

6. Establish clear goals and objectives for your future endeavors. Determine what you hope to accomplish, define measurable milestones, and stick to deadlines. Then, stay motivated by regularly checking your progress and striving to improve as necessary.

7. Stay organized and prioritize. Create weekly checklists to track tasks completed, and establish priorities for upcoming events. Always remember that nothing worthwhile ever came easily.

8. Set aside adequate funds to sustain growth. Invest wisely, and never hesitate to request additional funding when needed.

9. Don't forget to celebrate successes along the way. As you gain experience and skill, try to incorporate fun elements like team building exercises and creative brainstorming sessions to encourage healthy competition and camaraderie amongst colleagues.

10. Never stop learning. Keep up to date on emerging trends and innovations in the digital age, and continually strive to master new skills.

The term "reseller" has become synonymous with the word "vendor." But what exactly are you when you're selling your own products or services as a vendor? And why should anyone want to be one? We'll dive into this topic in greater detail below!

In short, it's a partnership between two parties where both sides benefit from each other. A typical scenario would involve someone who owns a product that they sell on their website (or another online platform) agreeing to provide some sort of service for the buyer. This could include anything from providing technical support via phone calls or emails to installing the product onto a device in which case they'd likely charge a fee for doing so.

It can also come down to something simpler like simply making changes to a product or adding functionality to it if the seller doesn't have the expertise required to do so themselves. In many ways, this is similar to outsourcing work to consultants or contractors - only instead of hiring full time employees, you hire people part-time.

But there are plenty of benefits that go along with working as a reseller. Here we discuss everything you need to know about them including the types of businesses they best suit and whether or not they're legal.

What is considered a reseller?

When most people think of resellers, they usually imagine someone who sells physical goods such as electronics or clothing. These kinds of resellers will typically buy large quantities of inventory at wholesale prices and then mark up those items by using markup percentages ranging anywhere from 20% to 200%.

However, things get trickier when talking about digital goods because unlike physical goods, these tend to be intangible assets that don't necessarily require any sort of manufacturing process beforehand. This means that unlike traditional resellers, most modern ones deal directly with the end user rather than dealing with manufacturers or wholesalers. As a result, all sorts of different terms have evolved over the years to describe these kinds of relationships, but here we stick to the simplest definition possible:

Someone who buys and sells software.

What is an example of a reseller?

There are countless examples out there of companies that specialize in buying and selling software on behalf of others. Some of the biggest names include Microsoft, Adobe, Apple, IBM, Oracle, SAP, Salesforce, Zendesk, and Shopify. The list goes on, but you probably already knew that since these companies make billions every year thanks to the sales of their products.

These days, many of these companies offer subscription models that allow customers to pay monthly fees for access to certain features within their applications. They even give these users the option to cancel anytime without penalty.

Another thing that makes these kind of resellers unique compared to other entities is that they're often times referred to as partners because they partner with the company that originally developed the application. For instance, Microsoft Office 365 is sold through its official channels and isn't available elsewhere unless you purchase it separately.

Similarly, Adobe Creative Cloud is sold exclusively through the company's official portals while Amazon Web Services offers cloud computing solutions to third party developers who use AWS' APIs to build apps and websites.

What does becoming a reseller mean?

Becoming a reseller may seem easy enough on paper, but in reality, it requires a lot of hard work before you see results. There are no shortcuts here. You must learn the ins and outs of all aspects of running a successful software business and take action accordingly.

Here are just a few tips to keep in mind when considering reselling:

Knowledge is power. If you plan to become a reseller, you absolutely have to educate yourself first. Don't assume that you know everything about the industry and the various products that exist today. Be sure to seek out information about new trends and technologies related to software products and the way they're used. Then implement those tools whenever possible.

Be flexible. It sounds simple, right? But flexibility is actually extremely important. Being able to adapt quickly is vital to success since there are always going to be changes in the market. If you aren't willing to accept change, then you won't survive long.

Work closely with the original developer. Most reputable vendors understand that having a strong relationship with their customer base is essential to survival. After all, if you were to disappear overnight, your customers wouldn't hesitate to leave them in droves. So it stands to reason that you should spend lots of resources nurturing existing relationships and building new ones.

Take care of your customers. Resellers are often viewed as middlemen, but in reality, they serve much larger purposes. By taking good care of your clients, you help improve overall brand loyalty which leads to increased revenue and profits.

Think globally. While it might sound cliche, global competition is real and getting stronger every day. When trying to expand your reach, you shouldn't limit yourself solely to local markets. Instead, look beyond borders and consider expanding internationally. Remember, the world is shrinking and everyone wants to compete.

Don't forget about automation. Automation plays a huge role in reselling, especially when it comes to creating and managing accounts. Since account management takes a great amount of effort, it's wise to invest in automated processes that handle tasks automatically. Doing so allows you to focus on higher level activities that bring in bigger profits.

If you follow these five steps, you'll soon discover that reselling is a viable career path that pays well and gives you incredible control over your life.

Is being a reseller illegal?

As mentioned above, the legality of reselling depends largely upon the type of product involved. For example, if you bought a piece of hardware and resold it, that would definitely fall under copyright infringement laws. However, if you purchased a license key for a game and then gave away copies to friends and family members, you'd be okay. Just remember that you still owe money for the privilege.

For the vast majority of cases though, reselling software falls under the category of fair use. Fair use refers to instances where a person uses copyrighted material for personal or noncommercial reasons. To determine whether or not a particular situation qualifies as fair use, courts examine several factors, but ultimately rely heavily on three main points: 1) Purpose, 2) Nature/characteristics of the work, and 3) Effect on the potential market.

To sum it up, if you're able to prove that you had no commercial intent when purchasing the item, then you qualify as a reseller. Also, if you believe that you've created a derivative work based off of the original content, then the fact that you're offering it for free is irrelevant.

Lastly, you don't legally have to disclose that you're a reseller when asked about it. In fact, most sellers prefer to remain anonymous altogether.

Conclusion

Reselling is incredibly beneficial for many individuals that either wish to supplement their income or gain additional experience in the field. Regardless of which route you choose, learning how to properly execute a reselling strategy ensures that you maximize your chances of success.

And speaking of success, let's talk about our favorite topic: Monday.com, a web hosting firm that specializes in reselling WordPress sites. Learn more about Sunday's story in our interview with founder David Heinemeier Hansson.

We hope this article was helpful to you! Feel free to comment below letting us know what other topics you'd love to read about in future articles.