The online landscape is complex, and shifts on a monthly, sometimes even weekly basis. In order to stay relevant, companies have quickly realized the need to adapt and adjust course at the drop of a hat. This can be a challenge, even for companies with low-cost structures and product flexibility. In fact, to stay abreast of the competition many companies have developed partnerships with other organizations who have complementary skill sets in order provide the best possible service to their customers.
If your company services small to medium-sized businesses (SMBs), one way of doing this is through a reseller partnership. A digital marketing reseller is a company or individual who sells a digital marketing product that is fulfilled or serviced by a third-party company. Think of it as outsourcing to be more cost or time effective.
For example, Denny’s Digital Media company sells websites. Denny has already built 15 websites and has 10 more website projects in queue. The first 15 customers who have already received their finished website, have now asked Denny if he can help them better market their site on search engines, such as Google and Bing. Denny doesn’t have time to take on any more work but cares about his customers and wants to make sure their websites can be found in search results.
Sally’s SEO Services sells SEO (search engine optimization). Sally is very good at helping businesses to move up in search results, and she has the time and manpower to take on more work.
Denny and Sally decide to enter into a reseller partnership. Through the partnership, Denny is able to offer SEO services to his customers, while still being able to focus on his core business—website production. Sally takes on all of the SEO work for Denny’s 15 customers. Both Denny and Sally get a share of the revenue—and Denny, Sally, and the customers all benefit from the partnership.
Now let’s look at a scenario where the company’s core business has nothing to do with digital marketing. For example, Tommy from Tommy’s Telecommunications provides his customers with reliable telephone and internet services. He has built strong relationships with his customers over the past 15 years. Because he has worked hard to get to know his customers and their businesses, he is aware that some of them have been struggling to adapt to the shifting marketplace and are experiencing a decline in revenue. Because Tommy cares about his customers, he wants to help them continue to grow their business—which in turn, will also ensure that he has a job providing telephone and internet services to them.
Tommy decides to form a partnership with Sally’s SEO Services so that he can offer a solution that will help his customers. During his monthly service calls, he mentions that he has partnered with Sally to provide SEO services. The business owner’s trust Tommy and decide to give SEO a try.
Just like with Denny, Sally is once again able to take on the SEO work for Tommy’s customers, and Tommy is able to continue focusing on his core business for his now happy and growing customer base.
In both of these scenarios, the businesses are able to create synergies by using their combined skills to benefit the customer. If Denny had stopped creating websites so that he could provide SEO services instead, he would not only have lost money from the websites that he could have been building, but he also would have wasted precious time trying to learn SEO. Since Sally already knew how to provide high-quality SEO services, the opportunity cost for Denny was much smaller. Similarly, Tommy had strong relationships with his customers and cared about their business’s success. Since he could not provide marketing solutions to them himself, he was still able to promise them a good-quality service with a partner he trusted.
There are many different types of businesses and industries that can benefit from a digital marketing reseller partnership. Whether a company is looking for an additional revenue stream, the ability to scale digital marketing operations, or if its customers simply need marketing help from a reliable source—a reseller partnership might be the right answer.
Types of Reseller Partnerships:
A White-Label partnership means that the company who is selling the services to their customers, is using their own name to market, sell, and service the solution. The partner providing the service is essentially acting as if they were a part of their partner’s company. For example, if Denny had white-labeled Sally’s SEO services, he would tell his customer’s that Denny’s Digital Media had a new SEO solution. Sally would then answer the phone as Sally from Denny’s Digital Media, rather than Sally from Sally’s SEO Services.
The benefit of a white-label solution is that it keeps customers from going directly to your partner rather than going through you. This would be beneficial for a company that does not have strong relationships with their customers—perhaps due to industry limitations or a transactional model. White-labeling would also benefit a company that depends upon having its own strong, personal brand. The downside of the white-label solution is that it often comes with heavy start-up costs due to the extra resources required for marketing and service.
A co-branded approach means that each partner’s name is included in the service. For example, if Tommy and Sally had used a co-branded reseller approach, Tommy would tell his customers that he was partnering with Sally’s SEO Services to provide them the highest-quality SEO possible. Each company would retain its unique identity within the partnership.
Co-branding is often a more cost-effective option because both partners are able to utilize their current resources for marketing and communication. Co-branding is an ideal solution for companies who have strong relationships with their customers or would benefit from showcasing their partner’s brand alongside their own. This is also ideal for businesses who cannot afford the upfront cost of the white-label solution.
A wholesale agreement means the company providing the product/service offers the reseller a discounted or wholesale rate. The reseller can either mark the product/service up to or over the normal retail price. The reseller bills the customer.
For example, Sally normally offers her SEO services at $500 per month, however, she agrees to discount the price at a wholesale rate of $450 per month. Denny marks up the service to the $500 retail rate, making a $50 return. Denny bills his customers $500 per month and sends Sally a check for $450 each month.
Another type of reseller partnership is commission-based. This means that the reseller sells the product/service at the normal retail rate. The servicing company bills the customer each month and sends the reseller back a commission.
For example, Tommy and Sally agree upon a commissionable agreement at a rate of 10%. Tommy sells the service at the regular $500 per month. Sally sends a bill to the customer for $500 and mails Tommy $50 at the end of the month.
Entering into a reseller partnership to provide additional services to your customers is a quickly growing trend for many industries. This is especially prevalent as SMBs continue to increase their digital advertising spend year over year—in 2016 growing by over 22% for a total of $72.5B. The flexibility that partnerships allow businesses, plus the opportunity to quickly scale, will help to address and effectively provide for this increase in demand for digital marketing.
If you think a reseller partnership would be a good fit for your company, Vivial is here to answer your questions.