How to Handle Potential Resellers (sales, sell, company, owners)

[aaauger]

Business owners or managers: how would you handle a resale request - especially from a potential competitor?

[harry chickpea]

Too little info. Depends on the product and situation. If someone wants rights to resell in a different or undeveloped market area, sounds good. Couple it with a non-compete clause and it sounds great.

Be aware that a company can be taken over by a major customer that can afford to pull strings. Never let sales to any one customer or reseller exceed 40% of total sales if you want to avoid this.

[aaauger]

Harry - Thanks for the input. We make a product that is used in construction projects and for a very specific niche. We're being approached by businesses that sell products into the same niche. Could they bring us substantial revenue? Possibly - especially with a formal reseller program. Would they get sensitive material as a reseller? Definitely. Could they use it to compete against us? Possibly - especially the larger businesses.

Resale seems tricky. Depending on how it's done, it could really hurt or help a business. But you seem to confirm that allowing anyone to resell our product without conditions is naive.