One of my friends runs a back-office operations firm and was recently approached by a software vendor who wanted her company to become the country’s reseller for their software. She asked me how I’d go about making that business decision. I wrote up this set of questions to help her think things through.
Considerations
- Market size and market fit
- Competitive Analysis
- Reseller Terms
- Partnerships and Alliances
- Marketing collateral
- Software implementation
- Go-to-market plan
Market Size and Market Fit
How big an opportunity is this?
- What is the global revenue for software X? What is the national revenue for software X in a comparable country? Who is their largest reseller in a similar country or region and how much does the reseller make?
- What market need is the product designed to meet? How well does the software meet these needs? Has there been an independent analysis or review of the software? What pros and cons were cited by the reviews?
- Is there a market for software X in the area you operate? What’s the target market size in your area? How many prospective customers have needs that can be met by the software in the area you operate? Amongst your existing customers, how many of them have this need?
- How many inquiries does the principal supplier get each year from your geographic area? What do they normally do to respond?
Competitive Analysis
Who are the competitors of software X?
- Are there competing products for software X operating in your area?
- If yes, who are they and how well do their offerings meet the needs of customers?
- What do their customers typically use the competing products for and can software X do as well or better?
- How do resellers in other countries position the product to successfully compete against these competitors?
- What are the competitors doing to market and sell their products?
Reseller Terms
What kind of relationship does the software vendor expect?
- Will the software vendor make you the exclusive reseller for your geographic area or do they have other channels that you will be competing against? Will they automatically refer to you any prospects who inquire on their website if the prospect is in your area?
- What kind of training and technical support will the software vendor provide your team? At what cost? What technical support staff will you be required to maintain by the principal supplier?
- Do you get reseller software licenses so you can conduct internal training and proof of concept development at no cost to you?
- What kind of reseller reports are you expected to submit and how often?
- What are the reseller margins? Will your margin revenue be enough to offset your staffing expenses and make a healthy profit?
- What sales quotas will you be assigned? What kind of gross revenue and net revenue are realistic for your area? What would be the optimistic net revenue figures?
- How is the software updated? Do you as a reseller have a role in supplying and installing updates? How are bugs reported and fixed?
- Is there a recurring maintenance or subscription fee? If yes, what percentage do you get as the reseller?
- Can you speak to any of their existing resellers to ask about their relationship and experience with the software vendor?
Partnerships and Alliances
What other companies can you work with to increase your market reach?
- Are there businesses in adjacent industries who can refer you to their clients in exchange for a referral fee upon closing the sale?
- Are there other products for whom the software itself is a natural, complementary fit? What other software and hardware products are frequently bought together with this software?
Marketing Collateral
What sales and marketing material exist right now?
- What marketing and sales techniques have they used with success in similar markets?
- How much work would you need to do to localize their marketing and implementation collateral (product briefs, sales presentations, proposal templates, white papers, success stories, project schedules, training materials, etc.) so that they’re useful for your area?
Software Implementation
How is the software implemented when a client purchases it?
- What do their implementation projects look like? How long does a project typically last?
- What decisions will a client have to make about the way the software is configured for you to roll out the software? Is there a checklist? How do you help a client decide on the configuration that works for them?
- Is the software vendor able to deploy their own team for your first two local implementation projects so your own team can shadow them and learn? Will they be the ones to conduct client training for the first two projects?
Go-to-Market Plan
How do you get the word out?
- What resources are the principal supplier willing to invest to help you grow the market? Are they willing to help your technical sales team build custom demos for a prospective client? Are they willing to work with your technical support team on a proof-of-concept project for a prospect?
- Can one of your company’s own workflows be the proof-of-concept so that (a) you gain internal expertise in creating and maintaining it, (b) you can show prospective clients how you use it yourself, (c) you can independently quantify the benefits of using it and will know better how to sell it?
- Can you pitch the software to prospective clients without tipping off the competition? Do you have a mailing list? Will you place an ad somewhere (and risk being seen by a competitor)? Is there an industry event coming up where you can have a presence either as a speaker or a sponsor or at a booth?
