Article · 20 min read

The GTM guide to building SaaS channel partnerships

MP Eisen · Bessemer Venture Partners (Atlas) Free Intermediate

The clearest single explanation of the five partner types and what each is worth, including real margin bands (20 to 30% for VARs, 5 to 10% for referral) and how to compensate your own AEs on partner deals.

  • VAR margins usually run 20 to 30 percent; pure resellers who only process the transaction get 5 to 10 percent.
  • Budget 10 to 20 percent of the purchase price for services and implementation on a partner-delivered deal.
  • Comp neutrality (reps retire quota at full list price) is expensive but stops AEs from fighting partner deals.
  • An alternative: pay reps on net revenue but require something like 25 percent of quota to be sold with a partner.
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It answers 7 questions

  1. What is a channel partner, and why would a software company hand over 30% of the price?
  2. Referral, tech partner, reseller, SI: someone offered us a partnership, which one is it?
  3. How do I work with a system integrator without losing the customer relationship?
  4. How do I tell whether a partnership is actually working, and when do I kill it?
  5. How do I choose between a distributor, a VAR and going direct in a new country?
  6. How do I stop my AEs from treating partner deals as a threat to their number?
  7. What margin should we give partners, and how do we stop channel conflict?

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