Let me tell you how re-seller partnerships work!!!

We have recently been asked to do some work for a customer that we don't have the in house capabilities to do. The customer in question really likes us and wants to engage us as the prime contractor, so we have gone out to the market to try and find a partner whose services we can re-sell. There are many out there who can do it, and the re-seller model for this is well established.

We have been in discussions with a number of companies, but there is one in particular whose attitude has amazed me. What's more, the company in question seem to be quite desperate to get the work, as they have sent a number of emails chasing up a response. However, they just don't seem to get the way a re-seller relationship works.

When it comes to pricing, we asked them what their rate to us will be and their response was, to paraphrase, “This will be largely shaped by the rate you sell to your customers”

Largely shaped by the rate we sell to our customers!!!

In other words, you tell me what rate you have sold to your customer and only then will I tell you how much I will sell my services to you for. Or, put another way, once I know how much you have sold to your customer, I will tell you what I think is a fair profit for you to make.

Well, I'm sorry guys, but it just doesn't work like that.

What we sell to our customers for is none of your business. We sell to them at whatever rate we want, add as much or little mark up to your prices as we like and are under no obligation to disclose to you what we have sold for. This is just the way it works in this game! We have plenty of relationships with other companies who sell our services on in exactly the same way.

In addition, in this sort of relationship we need to work with “knowns”. We need to know what the bottom line price to us is, all the time. We need a specific price list based on how much the company are prepared to sell to us for, not one that floats around based on how much we sell for. Again, this is just the way all other re-sellers work.

So, in this instance we have engaged a one man band who does this sort of thing day in day out. All his work come from companies like us and he knows exactly how to work with them. He does not care how much we sell him out for, he does not disclose who else he works for or what he does with them. What's more, when he does work for customers, he always does so under the auspicious of being an employee of the prime contractor and never tries to poach any work direct. He keeps very busy and, in fact, says he can pick and choose who he wants to work for. He is very easy to work with and does not consume lots of time or effort in our dealings with him.

Asked what price he will charge us, he gave a straight, simple answer. £300 per day.

Now, that's someone we can work with and keep busy and paid!

A potential sub-contractor yesterday...