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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on the principles outlined in our saas pricing book, Price to Scale, a reseller pricing strategy should be crafted to align with both the value your service delivers and the margin expectations of your reseller partners. Here are some key considerations:
• Directly tie pricing to value and cost:
Our framework emphasizes that pricing should reflect the measurable value customers—and in this case, resellers—receive from your service. When setting a reseller price, ensure that it still captures your underlying cost structure while offering your partners enough margin to justify the extra layer of selling and support.
• Develop a two-tier or channel-specific model:
Resellers require a pricing model that is distinct from direct end-user pricing. Consider establishing a wholesale rate that your resellers pay, which then allows them to add their own markup. This approach aligns with our broader pricing practices of segmenting packages to meet different market needs (as seen in our Good-Better-Best packaging approach). It ensures that while you maintain control over the base price, partners have the flexibility to tailor their offerings for their clientele.
• Account for the additional functions of resellers:
Remember that resellers aren’t just another set of customers—they perform the role of extending your sales channel, helping with customer support, and sometimes even localizing the product. Your pricing should factor in these additional services by providing a compelling margin that motivates resellers to aggressively market and support your service.
• Build incentives based on volume:
Since reseller success often depends on the volume of clients they bring in, consider tiered pricing or volume discounts in your wholesale structure. This not only aligns with the scalable nature of SaaS models highlighted in Price to Scale but also rewards resellers for growing the business.
In summary, handling pricing for customers who resell your service involves setting a wholesale rate that balances your cost inputs, value delivered, and the margin necessary to motivate your partners. This approach mirrors the strategic frameworks in Price to Scale—aligning price with value, supporting scalability, and using segmented models to address different market needs.