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Comment by mgbmtl | Hacker News Reader

Or see it the other way around: if you have a SaaS, don't underestimate resellers.

My company has its own product, but we also provide white-label services to other companies. We're terrible at marketing, and some of our partners operate in certain very specific niches, with their pool of clients. It's a mutually beneficial relationship.

(With the caveat that, if your aim is to build a pool of clients to then sell the company, well, we don't 100% own these clients).

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My business does exactly this. We have a very small sales team, but the firms white-labelling us have tens-to-hundreds of folks in sales and marketing, and sometimes provide a SaaS into which they bundle our white-labelled product. Our ("our"?) sales funnel is in the triple digits, and we have largely migrated away from sales towards fulfilling orders. It is a wonderful place to be!

If I had to choose between owning the sales relationship or the technology I know which I'd choose. Enjoy it while it lasts.

We have our own customers, too. In addition, the folks white-labelling use us in-house. We aren't strangers to the companies receiving our white-labelled SaaS; we do the initial customer on-boarding and provide all the higher-tier support.

Eleven years and counting....

But hey, you do you! I will be long retired by the time anyone gains traction with a competing offering. See you on the beach!

Pretty much any on-prem software vendor is some mix of direct sales, partner sales, and through distribution. And in the case of, say, a product primarily for SMBs, the mix is probably going to tilt pretty heavily to partners. There's a lot of leverage to using partners and many of them will know and be connected to some market a lot better than you do.

There are differences with SaaS but they may not be as big as you think. For example, AWS mostly started as a go online with your credit card sale. Now? They have a big enterprise sales force and lots of partner relationships.

I bumped into a friend on the street a year ago he and told me about the business he had recently co-founded and taken through YC: https://www.ycombinator.com/companies/partnered. I told my co-founder about it and it became a significant part of his sales toolbox. I saw my friend last week and shared the single criticism my co-founder had. My friend told me they had recently been acquired by a competitor whose core functionality resolved our pain-point.

Strategic partnerships and white-labelling seem to be critical tools for growth in the current climate.

Whether or not there's any white-labeling involved, partnerships (VARs, SIs, now often public cloud providers, etc.) have been a key part of sales strategy for many types of products for decades.

I think it comes down to who is the most easy to replace.

If the sellers kind of have a big chunk of the market, and can choose between vendors, you're indeed in a difficult spot.

On the other hand, if the market has multiple sellers, and you offer a unique technology, I wouldn't worry too much.

Why white-label instead of affiliate-selling without the brand dishonesty?

In our case, there is no "brand dishonesty". In some cases, the front-end is co-branded, in others the front-end is white-label while the resulting product, if used, has our branding. And sometimes the end-user gets the raw data without a need for our branded artifact. In the absolute best-case, the customer automates their interactions and never sees any branding. (I know the marketing people on here blanched when they read that.) Our concern is utility for the customer, growing that utility, retaining existing customers regardless of how we acquired them and who got the generous sales commission, while growing the number of customers and the volume of product used year-over-year.

Affiliate sales have always seemed more dishonest to me than working with a vendor who adds value to our product for our shared customers.

How do you calculate pricing? I have a saas and a lot of customers ask me for a white label solution, so they can resell it to their own customers, but I always struggle with how do I price it correctly.

The standard structure is referred to as Value Added Reseller's. Pricing and support is a balancing act because the VAR owns the customer relationship, not your business. Email me if you want to have a conversation as I ran a business with VAR relationships as well as direct sales. Email is in my profile.

As being also terrible in marketing..

What kind of SaaS is suitable for such a model? Any examples maybe?

Sounds like an MLM business...

MLM are about selling the pyramid. Partnerships are about selling the products other produce.

Microsoft does this really well.

Channel sales are important. When other people get rich off you, you get rich too.

You need more levels for that. Resellers in the model described by the GP make their money by selling the product, not by recruiting more resellers.

Without the "ML". The goal is to resell the software, not recruit people below you to resell and recruit more people, etc.

It's a bog-standard value-added reseller (VAR) model that has been around for decades. It actually can be a great thing because most industries have idiosyncrasies that can benefit from a focused approach from the vendor/reseller.

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