Loyalty glossary · 12b. B2B, channel and trade incentives (26)
Reseller Program
A reseller programme is a structured channel incentive that rewards third party sellers with rebates, points, or margin for selling a supplier's products. It is not a customer loyalty programme, because the qualifying behaviour is sales volume rather than end user engagement.
Most suppliers call their reseller programme a loyalty scheme, and that is the first mistake. A reseller is not loyal in the sense a consumer is; the reseller sells your product because the margin and rebates make it the most profitable use of their sales effort. Treating a reseller programme as a customer loyalty programme leads to the wrong metrics, the wrong tiers, and the wrong accrual rules.
The economic centre of a reseller programme is the rebate, not the reward. A supplier that builds tiers around points balances rather than margin contribution is paying for activity that does not produce revenue. The best programmes pay only for incremental sales above a baseline, because paying for sales the partner would have made anyway is a discount, not an incentive.
Work the numbers because the argument only lands with numbers on it. A supplier offers a 5 percent rebate on all reseller purchases. A partner with 200,000 dollars in annual purchases therefore earns 10,000 dollars in rebates. Raise the rebate to 7 percent and that same partner earns 14,000 dollars without selling a single additional unit, which is exactly the kind of cost that should be tied to incremental sales instead.
Qualification in a reseller programme must be activity based, not based on a partner's active member rate or the length of the relationship. A partner who has been registered for ten years but has not sold in the last three should not sit in a high tier. The only qualification that matters is recent sales volume, because that is the only input that predicts future sales.
Accrual rules decide when a rebate is earned and when it can be reversed, and the two dates are never the same in a well run programme. A supplier that accrues a rebate at invoice date but allows a return window of 90 days has built a liability it cannot see until the returns arrive. The fix is to accrue only on paid invoices and to require a partner tier to be held for a minimum period before the rebate rate increases.