A guide to choosing between referral and reseller partner models. Learn when to use each and how to structure incentives that drive results for both.
The decision between referral and reseller models often determines whether a partnership thrives or fizzles out. Get it wrong, and you create friction that neither side can overcome.
Referral partners identify opportunities and pass them to your sales team. They earn a commission when deals close, but they do not manage the sales process themselves.
Reseller partners own the entire customer relationship. They sell your product as part of their offering, handle negotiations, and often provide ongoing support.
The mistake many programs make is forcing all partners into the same model. A consulting firm with deep industry relationships but no sales team will struggle as a reseller.
Commission structures should reflect the model. Referral partners typically earn 10 to 20 percent of first-year revenue. Resellers, who take on more responsibility, should earn 30 to 50 percent or more.
Enablement requirements differ as well. Referral partners need just enough knowledge to identify good opportunities. Resellers need comprehensive training on pricing, implementation, and objection handling.
Some programs offer a progression path where referral partners can graduate to reseller status. This creates a natural incentive for partners to invest in the relationship over time.