Loyalty Register glossary
Reseller program
A supplier's formal program for businesses that resell its products, setting margins, tiers, incentives, support and rules for the relationship.
A reseller program is the formal structure a supplier uses to work with businesses that buy its products and sell them on to end customers. It sets the terms of the relationship: who can join, what discounts or margins resellers get, which tiers and benefits are available, how incentives and rebates work, what support and training the supplier provides and what rules resellers must follow. Reseller programs are common in technology, consumer electronics, industrial products and many other categories that sell through a channel.
Updated · By Loyalty Register Editorial TeamRelated terms
What does a reseller program usually include?
- Enrollment requirements and an agreement setting out terms.
- Pricing, discounts or margins, often varying by tier.
- Partner tiers with rising requirements and benefits.
- Incentives such as rebates, spiffs and sales contests.
- Deal registration to protect opportunities resellers find.
- Marketing support, such as co-op or market development funds.
- Training, certification, sales tools and a partner portal.
Is a reseller program a loyalty program?
It shares tools with one, such as tiers, points and rewards, but the motivation is different. A reseller chooses which brands to promote mostly on margin, demand, support and ease of doing business. Benefits that do not affect those factors rarely change behavior. A reseller program works when it makes the supplier’s products the most attractive ones for resellers to sell, and when its incentives pay for the behavior the supplier wants, such as new customers or a better product mix, rather than for sales that would have happened anyway. In a hypothetical case, raising a flat rebate from 5% to 7% on a reseller’s $200,000 of purchases costs the supplier $4,000 more a year even if the reseller sells nothing extra.
What problems are common?
Programs grow complicated over time, with layers of incentives that resellers cannot follow. Tiers based only on past revenue can keep long-standing but inactive resellers at high levels. Conflict with the supplier’s direct sales team undermines trust. Rebates accrued before return windows close can create unexpected clawbacks. Slow claims and payments discourage participation, especially among smaller resellers.
How should you judge a reseller program?
Track the share of enrolled resellers who actively sell each quarter, revenue and growth by tier, and the cost of incentives as a share of channel revenue. Measure how many new customers come through resellers and how much of the incentive budget goes to growth rather than existing volume. Ask resellers regularly how easy the program is to use, because complexity is one of the most common reasons they put their effort elsewhere.