Are you ready to work with resellers?

In this section we review key areas of the provider-reseller working relationship, ensuring you have the resources and processes in place to work effectively with resellers. Watch this video as Digital that Delivers trainer Amanda O'Donovan shares the benefits of working with resellers so you can reach your business goals.

BUSINESS SELF-ASSESSMENT

Partnering with resellers is a commercial arrangement. They market your business to new markets and new customers in exchange for a commission. The first question is, what level of commission can you support?

OPERATIONAL: RESELLER COMMISSIONS

Most resellers ask for 20%–30% which means on a €100 product, they want a net rate of €70 to €80. You can try to negotiate the commission level down. The lower you get your commission, the less margin the reseller has to market your products, the goal is not to squeeze it to the absolute minimum. A reseller may promote other products over yours if they have a higher margin on those products. Remember that the sales that you receive from resellers will be incremental. These should be sales that you wouldn’t get directly from customers. That said, it’s also important to remember that for reseller partners to market, sell, and support sales of your products, they need to be reasonably compensated for their efforts. They prioritise sales of products that are more profitable to them. Be sure to review your pricing to ensure you have enough margin to support the commission levels your reseller partners need to also be successful.

How to benefit from your reseller relationships

 Be available for questions.  Be responsive.  Communicate clearly and frequently.  Keep your content up to date, and in a format they need.  Help them with referrals, destination updates, or anything else to do their job better. Not all resellers provide an account manager, this depends on the size of your business and sales volumes. As a smaller business, you may get access to an extranet or private website. See Managing your account on page 24, for a more in-depth discussion of how to manage your reseller partnerships.

Market managers have a significant impact on how many bookings they generate for you.

OPERATIONAL: CAN YOU MANAGE YOUR ACCOUNTS?

To maximise your relationship with the reseller, make someone on your team responsible for communicating with the reseller and managing, at a minimum, the flow of information. The absolute minimum is to supply weekly updates with the latest content, special pricing changes, product information, and consistent service updates.

However, for larger reseller partners that are more valuable to your business, you should think about this as managing a relationship or partnership. Maintaining a strong and responsive relationship with your reseller partner may result in better listing opportunities and increased sales.

Aside from a handful of fully automated online travel agencies, most resellers have market managers, who manage the products sold in each destination. They have a significant impact on how many bookings they generate for you. These relationships are critical to your success.

CUSTOMER SERVICE

You work in a partnership with your reseller and each of you has responsibilities to the customer. If customer service issues arise, take responsibility, and apologise as necessary. This will prevent larger issues occurring such as negative feedback in online reviews.

HANDLING BOOKINGS

If you work with a booking system that is connected to resellers, you receive bookings directly into the system. If you or the reseller are not connected to that software, the bookings usually arrive via email. From there, it's up to you to keep track of the booking. Some resellers may request that you reply as a confirmation, generally within 24 hours.

ACCOUNTING, BILLING AND PAYMENT

Payment terms are a major part of any contract. For the most part, you are paid at the end of the calendar month following the customer visit. This can vary and you can always ask about a different payment term (for example, weekly).

PAYMENT TYPES

Pay on booking In this model, the reseller pays you based on bookings and not whether the customer arrived and redeemed a ticket. This is how some of the larger OTAs work, and the funds are paid out automatically.

Pay on redeemed Here, the reseller pays you based on the customer redeeming their booking. The reseller may keep the booking payment if the customer is a no-show. This is where your cancellation policy comes in. It is reasonable for you to expect to be paid in full if a customer does not cancel before a pre-agreed period. This should be agreed as part of your contract. For either payment type, you are often required to create an invoice, including an itemised list of bookings for the period, with products, dates, units (adults/ children etc.), the amounts and a total amount due. Most booking software have reports for this purpose, used to generate either invoices, booking reports, or both.

Once invoices are sent, you will have to deal with payment such as errors, customer changes, cancellations and re-bookings.