What is a Reseller Agreement Negotiation?
A reseller agreement is a legal contract between a supplier and a reseller. It outlines terms for how the reseller will sell products on the supplier’s behalf.
There are various aspects of the agreement that can be negotiated for mutually favorable terms.
Read the rest of this article to explore key terms that are commonly negotiated in reseller agreements and how to navigate the process. We’ll also feature tips for how a qualified lawyer can assist you.
What are Key Terms to Negotiate in a Reseller Agreement?
Some of the most commonly negotiated terms in a reseller agreement include:
- Roles and duties. Ensure that responsibilities are fair by defining who handles specific tasks, such as training and customer support.
- Pricing. Payment terms can be negotiated, such as profit margins, discounts, and payment windows, to increase financial gain.
- Exclusive rights. This should be considered during negotiations if high sales can be guaranteed.
- Risk and liability. Negotiate for a fair cap on indemnification exposure and clarify which parties handle specific issues that could arise.
- Intellectual Property (IP). How IP, such as trademarks, can be used by the reseller can be negotiated. The supplier might want to restrict usage to protect their brand.
How Do You Negotiate a Reseller Agreement?
When negotiating a reseller agreement, there are some important things to consider so that you can amend any unfavorable terms.
Identify Your Non-Negotiables
Before entering into negotiations with the other party, consider what your must-haves are, such as pricing and exclusivity, and what you’re happy to negotiate to meet the other party halfway.
Consider Future Business Growth
Think about how the agreement might fall short in the future if your company grows or new products are added. This will help you to negotiate for a bit more flexibility.
Discuss Realistic Sales Targets
Make sure that targets are aligned with market conditions and product availability so that commitments are fair and reasonable. You should also have clarity about what consequences apply if targets aren’t met.
Protect Marketing Investments
In agreements in which the reseller has to market the products, it’s worth considering if the supplier will contribute to the costs involved or provide other forms of support. This can serve to clarify anything unclear in the agreement.
Define Both Parties’ Obligations
Linked to the previous point, it’s advisable to consider what parties’ roles and duties are under the agreement. Ask questions to identify exactly what both will be responsible for completing, as this will reveal hidden risks, prevent ambiguity, and help you assess if the deal is valuable.
Get a Legal Review of a Reseller Agreement
Before negotiating terms in a reseller agreement, it’s important to review it so that you identify red flags and anything you’d like to change. Hiring a lawyer who’s experienced in contract review can assist you as they will identify things you might miss.
Online legal platforms make it easy to hire a lawyer who’s reputable and can provide a thorough contract review for you.
ContractsCounsel is one of the largest online legal marketplaces that gives you access to a curated network of lawyers who have been vetted on the platform.
Here’s how to request that a lawyer on the platform reviews your reseller agreement:
- Visit the ContractsCounsel marketplace, where it’s free to post a project.
- Select ‘One-time project’ and ‘Contract review.’
- Post your project, or request, for a contract review.
- Include some details of what you need to match with suitable lawyers.
- Wait for bids. You’ll receive multiple bids from lawyers directly on the platform who are ready to assist you.
- Review lawyer data. The platform provides lawyer information you can peruse before selecting a lawyer, such as the lawyers’ location, expertise, years of experience, and client ratings for projects they’ve completed on the platform.
- Select a lawyer and hire them to review your reseller agreement for a flat fee.
Do You Need a Lawyer to Help You Negotiate a Reseller Agreement?
A lawyer is worth hiring to help you negotiate terms in your reseller agreement because they’ll protect your commercial interests and ensure that the contract allocates responsibilities and risks in a fair manner.
A lawyer can negotiate your reseller agreement by:
- Reviewing the reseller agreement to identify your commercial and financial risks before you sign the contract.
- Discussing the pricing and payment margins to protect your profitability.
- Negotiating with the other party for realistic targets and appropriate consequences if they aren’t met.
- Protecting you against price changes, such as by negotiating for advance notice requirements.
- Considering aspects of payment terms you might not consider, such as late-payment charges or disputed invoices.
- Ensuring that you acquire the necessary IP rights so that you can use the supplier’s IP in permitted ways that are aligned with your business activities, without the risk of accidental violations.
- Negotiating liability and indemnities, as this allocates responsibility for events such as product defects or claims.
- Ensuring that the final agreement is put in writing and reflects the commercial deal in question.
Where Can You Find a Lawyer for a Reseller Agreement Negotiation?
Finding a lawyer to help you negotiate a reseller agreement shouldn’t be a time-consuming process. You can connect with a reputable and experienced lawyer on an online legal platform such as ContractsCounsel. All lawyers on the platform are vetted and ready to assist you with negotiating for a more mutually favorable contract.
A lawyer will identify any hidden risks in the contract and revise them, while establishing terms that are fair, specific, and meet your requirements.
