#P2PNow: What are Good Partner Margins - YouTube

Today's episode will be an interesting one,  "What are 'good' partner margins for a vendor?"  

I feel like this is a changing standard, it has been shrinking lower and lower, does that sound about right Sam?  

One hundred percent, when we started to  develop the AvePoint partner program we set out  

with the intent to make a next-generation partner program while there's a lot of factors we had to  

consider the biggest revelation was how partners  made money overall with their vendors   

So based on your tone I'm guessing that's not through  margins?

That's correct, large vendors like Microsoft and AWS

have been shrinking their  margins slowly but surely over the past couple years  

the reason is that partners are making  the majority of their money not on the resale  

rather on the services that are bundled with the  vendor's tools   

Well that makes a lot of sense

but it gets back to that question though so even  considering the shift in how partners make money  

what are reasonable rates that a partner can  expect to receive?   

Yeah so I'll start with the evil consulting answer which is "it depends"

but you should really consider when looking at margins  

is what is the return on the partnership working  with this vendor but to be more specific large  

companies like Microsoft and AWS have by far the  tightest margins sometimes as low as three percent  

on that new sale however they're also at the  largest biggest brand in resource impact too  

if you become a Microsoft or AWS certified  partner you've added a massive amount of  

credibility to your organization also these  licenses aren't so cheap so even with tighter margins  

if your company is reselling at a  certain scale it can make a big difference  

SaaS companies like AvePoint size can be close to a 15-20 percent range  

while the software capabilities might not be as  expansive we offer advanced training dedicated  

account managements and this is ultimately how  we're able to compete when more and more   

sales are going out and we have to  make our margins stand out a bit more because  

we're not as large as some of those  you know sometimes trillion dollar organizations  

but we're also introducing additional benefits  such as rebates and MDF programs to make sure that  

the total amount that you're receiving from  AvePoint far exceeds that 20 percent of sale  

in a total year now with other vendors that  have more on-prem solutions they can go up to  

30 to 35 percent on their margins however you have  a cost to set up and to maintain that back end   

so you have to factor that into account when you're  looking at the total return on partnership   

you know when you phrase it as a return on partnership  you begin to see that margins don't make up the entire story 

absolutely you can actually speak  with when you think about it can you  

actually speak with a team member from the vendor?  Are you getting rebates? Are they easy to access?  

Is MDF an option? What are the services you can  develop around the solution? 

Does the vendor share leads with you? What's  your "better together" story from an executive perspective? 

it's one of those things that  it's not easy to really figure out all the times  

how these partnerships are set up and designed  so more and more vendors are trying to offer  

more and more capabilities and benefits of their  partnership just outside of the initial margin  

the fact of the matter remains that partner  margins are becoming just a small piece of that overall puzzle  

that is some great insight  and i'm sure there are a lot of folks that are  

out there that get hung up on the number and  don't take the entire relationship into account  

and AvePoint of course we're all about that  relationship we're working to create more and more  

opportunities for our partners and to   really increase the value of that return on  

partnership it's very important to us  and as always to find out more about  

partnering with AvePoint you can go to visit  our site at www.avepoint.com/partners