Evaluating distribution channels and partners

This section covers key distribution channels. Find opportunities for your business and learn how to evaluate potential resellers, including considerations for different resellers and assessing your internal operational needs.

Before considering the merits of working with resellers, it’s important to know what to expect. What are their requirements and what are the essentials you need to know to inform your next moves?

PRODUCT REQUIREMENTS

The first decision is to choose which products you’d like to offer to resellers. Many experience providers do not offer their full line-up of products. You may decide not to offer certain tours, ticket types or date windows that you know you can sell directly. But remember that resellers will want to offer your most popular products, not just those that you are struggling to sell elsewhere.

Spend time getting everything set up before you reach out to potential distributors. Resellers will ask for your product information, which you should prepare in advance. You’ll need high resolution images, descriptions, and product details. As each reseller is different, they will let you know what they need specifically. The sections: “Rules of engagement for contracting and partner management” and “Making your products ready for online booking” provide guidance to help you prepare for working with resellers.

Key Insight

According to Arival research of a survey of 2,500 providers worldwide, 51% listed all their products with resellers, while the remainder kept some tours or tickets to be sold exclusively through their direct channels.

COMMERCIAL REQUIREMENTS

Like any commercial partnership, most resellers require you to sign their contract. This can be anywhere from three to 80 (yes, 80!) pages. Online Tour Operators, OTAs, many of the terms in these contracts may be non-negotiable. However, many of the terms may be negotiable with other traditional or offline resellers such as travel agents and/or inbound tour operators.

There will be lengthy sections about liability, copyright, and other issues which are not generally worth arguing about. Resellers care most about commission terms. They will usually have minimum insurance coverage requirements and will ask you to name them on your insurance policy. Resellers will want to offer your most popular products, not just those that you are struggling to sell elsewhere.

The things you can negotiate are the commission rates, which will usually be in the 15%–30% range but can vary widely based on the type of reseller. For more details, refer to the table on page 12.

Payment terms are usually not negotiable. The typical payment term is referred to as Net 30. This means that the reseller will pay you 30 days after you invoice them. You typically invoice them at the end of a calendar month for any bookings with a travel date (not booking date) which fell during that month.

Some larger resellers and many OTAs provide automated payments that do not require invoicing. They automatically issue payments based on tours taken during that month. You need to reconcile those payments with reporting from your own booking system to ensure you are receiving correct payment from your partners.

You should also have a simple contract that you can supply for those resellers who do not have their own agreement. This can be very short, covering the most important legal matters and you can always cancel the agreement at any time.

TECHNICAL REQUIREMENTS AND INTEGRATION

FREE SALE, BLOCK/ALLOCATION, OR ON REQUEST

Traditionally, resellers have used Free Sale, Block/Allocation, or On Request methods to manage availability on their systems. The benefit of these methods is that they do not require any technical integration between the reseller and the experience provider, and they allow the reseller to sell without a lot of restrictions.

Neither Free Sale, Block/Allocation, or On Request is an ideal solution and can result in overbooking in the case of Free Sale, locking of inventory in the case of Block/Allocation, and delays in the case of On Request.

MANAGING THROUGH API

The ideal solution for managing availability with a reseller is to use a booking system that has an API connection. For resellers that can support the API connection, this provides real-time availability and booking capabilities.

MANAGING WITHOUT API

For resellers that do not have an API connection, there are two alternatives: 1 The reseller can book with you over the phone, and your staff enter the bookings directly into the booking system’s back-office portal. 2 The reseller can book directly in your system via a B2B booking portal, powered by your booking system, which provides private access to the rates and products available to that reseller. This ensures that all bookings, regardless of channel, are managed in a single system. It reduces the risk of overbooking and eliminates the need to manually manage bookings through offline methods, saving you precious time and resources.

If your booking system supports and relates to the reseller system, there is minimal setup. This is handled by you, directly in your system, or by whoever is your software provider.

Setup varies depending on the system and the reseller, but once you have completed this stage, there should be minimal maintenance.

It’s important to note that this can be a tricky stage as there are various items to manage, but the results are worth it.

What are the technical requirements you need to consider when dealing with a reseller? We discuss Free Sale, Block/Allocation or On Request as well as API and non APIs.

Getting setup

If your booking system supports and relates to the reseller system, there is minimal setup. This is handled by you, directly in your system, or by your software provider.

Setup varies depending on the system and the reseller, but once you have completed this stage, there should be minimal maintenance.

It’s important to note that this can be a tricky stage as there are various items to manage, but the results are worth it.