I'd echo Mick's answer but also add that I like to split 'Resellers' into two different buckets for SaaS.
1. Pure Resellers
These folks purchase the SaaS product (to show commitment to selling it) and then spend time re-selling the product. They DO NOT do anything else besides sell and provide referrals. Generally they are commissioned similarly to your sales people, but can provide a discount so they can make their margin.
2. Value Added Resellers (VARs)
These people buy your product, sell it (and get a commission), but then also do implementation for the people they sell it to. The money maker for VARs is being able to charge for professional services (which can often be much more expensive than the SaaS product itself). You should discuss how much they charge for services (you don't want there to be a huge discrepancy in how your product is implemented), but this will definitely vary between VARs.
The exact terms and payment amounts can vary depending on your product but hopefully these two distinctions can help with the way you approach structuring terms.
FAQs
How is SaaS different from other types of sales? Selling Software as a Service is complex as you're not simply delivering a product as soon as you make a sale. Instead, the software must be supported and engineered, meaning that SaaS sales teams must build lasting customer relationships to ensure future sales.
What is SaaS selling? ›
Put simply, SaaS sales is the process of selling internet-based software. This sales industry requires a high level of customer service and attention, which makes consultative selling a favorite tactic. This is due to the fact that SaaS reps are usually selling big ticket items with a high price tag.
How do SaaS resellers work? ›
What Is a SaaS Reseller Program? A SaaS reseller program, also known as a SaaS partner program, involves a reseller buying products and services from a SaaS company at low prices and selling them to clients at a markup.
What is the difference between upsell and cross sell SaaS? ›
44% of SaaS companies say they get more than 10% of new revenue from upselling and cross-selling. But, what's the difference between the two? It's quite simple. Upselling refers to the practice of selling a larger package, whereas cross-selling is the act of selling customers additional related products.
What is the average revenue per sales rep for SaaS? ›
Ultimately, in most SaaS startups, the sales reps will take home about 20% of the total deal value they close. Maybe 25% if SMB sales and/or a startup is very well funded. At scale, this will come down, ultimately to about 10% of deal value as bonus. At scale, the ultimate state of almost all sales is a 10+10 plan.
What is SaaS in simple terms? ›
Software as a service (SaaS) is a software licensing model, which allows access to software on a subscription basis using external servers. SaaS allows each user to access programs via the internet, instead of having to install the software on the user's computer.
What is SaaS product in simple terms? ›
Software as a Service (SaaS) is a cloud-based software model that delivers applications to end-users through an internet browser. SaaS vendors host services and applications for customers to access on-demand.
How to pitch a SaaS product? ›
Use concrete examples
To make the benefits more tangible, use real-life examples of how the product has helped other customers. This could be in the form of case studies, testimonials, or success stories. By providing concrete examples, you can help the customer understand how the product can specifically benefit them.
Do I need an LLC to sell SaaS? ›
Overall, SaaS startup businesses should form an LLC since they won't be bringing in much revenue and aren't going to need big investors. The burden of dealing with the regulations of a corporation would make you worse off.
Is selling SaaS difficult? ›
Longer Sales Cycle
SaaS products often have longer sales cycles as they involve complex integrations and are charged at a higher price point, especially in enterprise sales. As a result, SaaS sales reps must engage with multiple stakeholders and address various objections before closing a deal.
Given the SaaS licensing model, you typically setup a recurring commission. It varies from (10% - 35%). The percentage can vary depending on the expertise of the reseller. If the reseller can handle product demo, provide first line support and on-board clients.
How do I compensate SaaS sales reps? ›
Variable pay, or pay for performance, is considered a good commission model for SaaS sales wherein a sales representative receives extra money on their salary. For SaaS sales, the standard commission rate is around 10%. So, for example, if a rep closes a $10,000 deal, they will receive a $1000 commission.
What is SaaS vs regular? ›
SaaS Software Development Company offers flexibility and cost-efficiency, while Traditional Software provides control and customization. Understanding the pros and cons empowers businesses to make informed decisions, aligning their software choices with their strategic goals.
Is SaaS the same as tech sales? ›
Today, tech sales mostly refers to software sales—specifically, selling SaaS products. But there's more to tech sales than that. Finding a good position in tech sales isn't easy, but it's not impossible.
What is the difference between SaaS marketing and normal marketing? ›
Customer Acquisition
In contrast, SaaS marketing adopts a targeted approach, utilizing digital channels like search engines, social media, and email marketing. Additionally, SaaS companies leverage data-driven techniques such as AB testing and lead scoring to optimize marketing efforts and enhance return on investment.
What is the difference between SaaS sales and customer success? ›
The SaaS business model relies on customers purchasing software on a recurring basis, and Customer Success focuses on ensuring that these customers activate on and effectively use the software, remain engaged and satisfied with the product, and derive value from it.
