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Five Common Mistakes to Avoid When Reselling SaaS Products

SaaS Reseller Mistakes

A SaaS (Software as a Service) reseller is a company or an individual who purchases software products or services from a SaaS provider and then sells them to end-users, either directly or through a channel. The SaaS reseller can be an intermediary between the SaaS provider and the end-user or can add additional value to the software product by offering additional services such as customization, integration, and support.

The role of the SaaS reseller is to identify and target potential customers, promote and market the software product, negotiate the terms of the sale, and provide customer support. The SaaS reseller may also be responsible for billing and collecting payments from customers.

SaaS resellers can operate in various business models, including a value-added reseller (VAR), where they bundle the SaaS product with other services to provide a comprehensive solution to their customers, or as an independent reseller, where they focus solely on selling the SaaS product.

The Growth of the SaaS Market

The SaaS market has experienced significant growth in recent years, and here are some statistics to support this:

  • According to Grand View Research, the global SaaS market size was valued at USD 158.2 billion in 2020 and is expected to grow at a CAGR of 11.7% from 2021 to 2028.

  • In 2020, the SaaS market represented 24% of all enterprise software spending, up from 18% in 2017, according to Gartner.

  • The COVID-19 pandemic accelerated the adoption of SaaS, with businesses increasing their investment in cloud-based software to support remote work and digital transformation. A report from Synergy Research Group found that the SaaS market grew by 21% in 2020, compared to 2019.

  • In a survey of IT decision-makers conducted by BetterCloud, 73% of respondents said they plan to increase their SaaS spending in 2021.

  • According to Statista, the global SaaS market is projected to reach USD 307.3 billion by 2026, up from USD 158.2 billion in 2020.

  • The most popular categories of SaaS products in 2020 were customer relationship management (CRM), productivity, and collaboration, according to BetterCloud.

These statistics demonstrate the continued growth and importance of the SaaS market, with businesses increasingly turning to cloud-based software to improve efficiency, reduce costs, and support digital transformation initiatives.

The Benefits to Becoming a SaaS Reseller

Here are some reasons why becoming a SaaS reseller can be a lucrative and beneficial business opportunity:

Low Startup Costs

Starting a SaaS reselling business can be relatively low-cost, as there is no need to invest in developing the software product. Instead, resellers can purchase a license or subscription from a SaaS provider and start selling to customers right away.

Recurring Revenue

SaaS products are typically subscription-based, which means that resellers can generate recurring revenue from ongoing subscriptions. This can provide a stable and predictable income stream for the business.

Access to a Broad Market

As a SaaS reseller, you have access to a global market, as the products can be sold and accessed from anywhere with an internet connection. This allows resellers to target a broader audience and expand their reach.

Opportunity to Provide Value-added Services

SaaS resellers can differentiate themselves by offering value-added services, such as customization, integration, and support. This can increase the perceived value of the product and help to retain customers over the long term.

Flexible Business Model

SaaS reselling can be a flexible business model, as resellers can choose to sell products from multiple providers or specialize in a specific niche. This allows resellers to adapt their business to changing market trends and customer needs.

Support from the SaaS provider

Many SaaS providers offer support and resources to their resellers, including training, marketing materials, and technical support. This can help resellers to sell more effectively and provide better support to their customers.

Five Common Mistakes to Avoid When Reselling SaaS Products

Here are five common mistakes to avoid when reselling SaaS products:

1. Not Understanding the Product

One of the biggest mistakes resellers make is not understanding the product they are selling. This can lead to incorrect positioning, missed opportunities, and lost sales. Take the time to familiarize yourself with the product's features, benefits, and limitations before trying to sell it.

2. Focusing on Price

While price is an important consideration for customers, it should not be the only factor you focus on. Resellers who try to compete solely on price often find themselves in a race to the bottom and may not be able to sustain their business over the long term. Instead, focus on the value the product provides and how it can help your customers achieve their goals.

3. Not Targeting the Right Audience

Another common mistake is not targeting the right audience. Make sure you understand the needs of your target market and how the product you're selling can help them. Trying to sell to everyone is a recipe for failure.

4. Not Providing Sufficient Support

Customers expect good support when they purchase a product, and if you're reselling a SaaS product, you need to be prepared to provide that support. Make sure you have the necessary resources in place to address any issues that arise, and be proactive in reaching out to customers to ensure they are satisfied.

5. Not Having a Clear Pricing and Commission Structure

Reselling SaaS products can be profitable, but you need to have a clear pricing and commission structure in place. Make sure you understand how much you'll be earning on each sale and what your responsibilities are in terms of support and customer acquisition.

About LMS Portals

At LMS Portals, we provide our clients and partners with a SaaS-based, multi-tenant learning management system that allows you to launch a dedicated training environment (a portal) for each of your unique audiences.

The system includes built-in, SCORM-compliant course authoring software that enables most anyone to build engaging courses quickly and easily.

We also offer a complete library of ready-made courses, covering most every aspect of corporate training and employee development.

If you choose to, you can create Learning Paths to deliver courses in a logical progression and add structure to your training program. The system also supports Virtual Instructor-Led Training (VILT) and provides tools for social learning.

Together, these features make the LMS Portals platform the ideal solution for our SaaS reseller partners.

Contact us today to get started or visit our Partner Program pages

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