Partnerships are quickly becoming an important growth channel for organizations across the globe.

This trend is particularly evident in the Cloud GTM space, where companies collaborate with Cloud Service Providers to extend their reach.

Salesforce’s State of Sales report states that within the next 12 months, companies expect to collaborate and grow faster with partners. Also, 84% of sales professionals stated that partner selling made a huge impact on their revenue.

In the Cloud GTM space specifically, many companies join forces with Cloud Service Providers to further sell their solutions.

Vince Menzione, CEO at Ultimate Partner, says, “Marketplace co-selling is happening faster than predicted. Software-as-a-service (SaaS) and independent software vendors (ISV) are having co-sell conversations with their respective hyperscalers, uncovering customer underspent on cloud commits.”

With this evolving sales landscape, if you’re not adopting co-sell motions, you’re bound to fall behind.

But wait, what is co-selling? Is it the same as reselling?

Well, they may sound similar but they have very different execution.

In this blog, we’ll explore each of these sales motions and understand which would work better in your favor.

Let’s start with reselling.

What’s reselling?

Anybody who has purchased from eBay or Facebook Marketplace has engaged with resellers in some capacity — and let’s face it, it’s most of us!

Reselling is built on a similar notion in the software space — it is a strategic business model where organizations act as the middleman between software vendors and customers. They purchase licenses and resell the software, boosting value through continued support, services, and market reach.

This model is officially referred to as the Software Reseller Business Model.

Pictorial representation of how reselling works
The Independent Software Vendor authorizes the reseller to sell their products

Some of the vital responsibilities of resellers include:

  • Sales: Actively promote and sell software to customers through online channels, direct outreach, and stores.
  • Customer Support: Help customers with installing, troubleshooting, and using the software to keep them happy and coming back.
  • Product Knowledge: Stay up-to-date on the software’s features, benefits, and updates to answer questions and make helpful suggestions.
  • Marketing: Create and run marketing campaigns to attract and keep customers using social media, online ads, and other promotions.
  • License Management: Keep track of software licenses and subscriptions, making sure they’re renewed on time and meet all requirements.

Now it’s only natural for you to wonder how the original vendor profits from this.

Pitfalls of the reseller model

While the original vendor reaches more customers, builds brand awareness, and market reach through resellers, most benefits stand against them.

Firstly, resellers control the narrative around the product since they own the sales process. This means original vendors have no control over how their product is perceived and received.

Second, part of the profits gained from reselling goes to the reseller, whereas via direct sales, the profits will go to you.

Third, training and enablement. Since you have no control over how resellers sell your product, you need to invest time, effort, and resources to properly train them. Software products often require training for proper usage. But with the multitude of products that resellers deal with, it may be difficult to get a hold of them for proper training.

These factors, although not actively, tip the balance toward co-selling.

Now, what is co-selling?

Co-selling is when two companies band together to jointly sell their complementary products or services. 

This way, both parties are equally involved in the sales process and have an equal say in how the product or service is perceived and received by customers.

Let’s take a deeper look at why this sales motion is picking up.

Benefits of co-selling

Infographic outlining the advantages of co-selling

Businesses trying to maintain a competitive edge over their competitors are quickly realizing the importance of banding with complementary orgs to combine their efforts to sell their solutions together. The following reasons are why:

Shorter sales cycles

Co-selling is a powerful way to move leads through the sales cycle and communicate credibility since it successfully produces social proof from your partners. Additionally, workflow bottlenecks between your partners’ and your own sales and marketing teams will be eliminated, which could otherwise delay negotiations. A sales team that is more productive and efficient will be able to close deals more quickly.

Increased brand visibility

Getting into co-sell relationships with your ecosystem partners who already have established brand recognition is an excellent way to boost your own reputation and credibility. 85% of decision-makers are likelier to engage with and shortlist vendors they recognize and trust.

Tap into unexplored markets

Your partner can introduce your solution to a completely new market, which can lead to new prospects. By piggybacking on their reputation, you could persuade these potential customers to try your product or service and demonstrate how you can transform their lives. You never know, you might even find a few new use cases!

Smoother customer experiences

Now, for the most important benefit of co-selling. This approach often involves collaborating with your partner to deliver more tailored solutions to customers.. 84% of customers prioritize brands that offer personalized attention and excellent service — including tailored solutions! Through co-selling, your team can show that they care about the solutions customers are investing in and that they want the best results for them. It shows that your vendors have not just looked beyond what their own products can do, but have also thought about how to make their customers’ situations even better.

TLDR: Co-selling vs. re-selling: What’s the difference

Aspect Co-selling Reselling
Definition A sales motion where two companies come together to sell their complementary solutions. A business model where authorized organizations buy software licenses and sell your solution to end users.
Partners  Ecosystem partners (Cloud partners, hardware partners, MSP partners, etc.) Authorized resellers
Buyer expectations Buyers get a combination of solutions that are more tailored to their needs Buyers get only your solution
Incentives Deal referrals, and co-sell, co-build, and co-marketing activities

 

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