Reseller agreement: selling through somebody else without losing control

A reseller agreement governs somebody selling your product as their own transaction — they buy from you and sell on, or they sell in your name for a margin. The distinction from an agency arrangement matters more than it sounds: a reseller contracts with the customer, which decides who carries the credit risk, who handles support, and crucially who owns the relationship when the arrangement ends.

What a reseller agreement has to settle

• Territory and exclusivity, including whether exclusive means you may not sell directly there either.
• Pricing: whether you set a price, recommend one, or let them choose — and what that does to your positioning everywhere else.
• Who owns the customer relationship and the data, which is the clause that decides the value of the arrangement to each side.
• Who provides support and at what level, since customers will contact whoever answers fastest regardless of the contract.
• Minimum commitments, if any, and what happens when they are missed — exclusivity without a minimum is a gift.
• Use of your brand: what they may claim, what they may not, and whether they can describe themselves as official.

The clauses that cause disputes

Three, consistently. The first is pricing to the end customer, where a reseller discounting heavily damages your direct sales and a reseller marking up heavily damages your reputation. The second is the customer list at termination — if that is not explicit, both sides believe they own it and both are partly right. The third is support, because an unclear split means the reseller tells customers to contact you and you tell them to contact the reseller, which is the worst possible outcome for a customer who has already paid.

Decide the termination position before the relationship starts, not when it is ending. Who may contact those customers afterwards, what happens to support obligations already sold, and whether the reseller can keep trading existing contracts — these are cheap to agree while everybody is optimistic and impossible to agree once somebody wants out.

Practical protections worth having

1. A term short enough to be renewed deliberately — three years of exclusivity to an untested partner is a long time.
2. Performance measured against something, even if softly, so the conversation about underperformance has a basis.
3. Payment terms and credit limits, since a reseller carrying your product is also carrying your money.
4. Approval over material claims made about the product, because you own the consequence of their marketing.
5. A requirement to pass on enquiries outside their territory rather than quietly servicing them.
6. The right to audit sales reports where royalties or tiered pricing depend on volume.

When not to use one

When you cannot support it. A reseller channel needs material, training, pricing discipline and somebody answering their questions, and a partner who signs an agreement and then hears nothing sells nothing. The commonest failure is not a bad contract but a signed one with no programme behind it — which costs a year of exclusivity and teaches the market that your product is hard to buy.

Ettex Records keeps the agreement with the dates that decide everything — term, renewal, notice deadline — alongside the territory and the commercial terms, so the question of what was agreed with whom is a lookup. The notice deadline in particular belongs in the register rather than in the document, since that is the date somebody has to act on.