"Akhil you are a lawyer! You don't know anything about making profits and sales!!"

True but also not true.

I know how to keep the profits up of the companies I work with.

Which is another way of saying I prevent losses.

And also make sure that you take the right steps to maximize those profits.

In the software business, distribution is far easier than in a hard product business.

But it’s still a better idea to partner with a local when tapping into new markets.

The reason is simple - They know their territory better than you do.

But, remember that giving someone a license to sell your software comes with some repercussions.

The obvious one is the loss of control over sales by such a third party.

So instead, you should know how to best utilize such a partnership by putting some limitations on your contract.

There are some restrictions that are used in reseller agreements.

And in this post, I tell you what they are.

And what I typically focus on with my team to maximize profits for companies we work with:

1) Territory Based Restrictions

The most common method of restriction on resellers is “territory-based” restriction.

For example:

If your primary market is the US.

And you want to tap into Dubai, you would usually restrict the partner to sell outside the Dubai region.

You can also restrict the territory to smaller areas such as a particular city.

2) Customer Type Restriction

You can also use restrictions on resale based on the end customer.

If a vendor sells products across different parallels such as both B2B and B2C.

Then they would put a restriction on the type of customer their reseller can cater to.

It can also include usage-based restrictions.

Such as restricting reselling based on specific applications.

3) Exclusivity

There are also cases where resellers/partners would want exclusivity in terms of selling in a territory or end customer.

If you grant exclusivity, then always consider 3 points:

1) Market size

2) Partner capability

3) Resources available

It often involves setting a Minimum Order Quantity (MOQ) to maintain exclusivity.

And periodic review of such MOQ, depending on demand.

Partnership done the right way is beneficial for both - vendor and reseller.

That's it!

Using a reseller is actually a smart move.

You can get access to a new market and also sell there with the help of connections.

However, as a vendor, you should be cautious.

Entering into such partnerships is great.

But never rush the deal, otherwise you might be cutting your profits short.

And also putting unnecessary restrictions on your own business.

And in case you need someone to draft you a Contract that does all this, pick a Time here:

https://calendly.com/mtlegalteam/discovery-call-with-mtlegal-team

Talk to you soon.

-- Akhil Mishra