A reseller is a company that buys a vendor's product (often at a discount) and sells it to end customers at a markup. The reseller takes ownership of the customer relationship for the transaction, handles billing, and often provides first-line support or implementation services.
Reseller models have deep roots in IT distribution. Before cloud delivery, most enterprise software and hardware reached customers through networks of resellers who maintained local inventory, provided technical support, and managed ongoing customer relationships.
In the SaaS era, the reseller model has evolved. Instead of buying and stocking physical products, SaaS resellers manage licenses on behalf of customers, handle billing and procurement, and bundle the software with implementation and managed services. The economics shift from product margin to service margin.
Vendors use resellers to reach markets they cannot cover with direct sales. A US-based SaaS company might use resellers in Japan, Brazil, or Germany where local language, business customs, and regulatory requirements make direct sales impractical.
Reseller agreements define pricing (typically 20 to 40 percent discount off list), territory rights, minimum commitments, support responsibilities, and brand usage guidelines. The best reseller relationships are mutually dependent: the vendor needs the reseller's customer access, and the reseller needs the vendor's product to build their services practice around.