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I have a small company. We work with others that resell our services. Sometimes we are contacted directly by the end client to bid on contracts that our resellers have already bid on.

How can I work with resellers and end clients without jeopardizing my relationships?

As my business expands this type of situation is likely to come up more and more often. How do I decide if I should sever ties with the resellers?

  • A is not aware of my relationship with X and Y. X being the company you own? Your way of referring to the players involved is making this very confusing to the point that I can't make sense of your situation or what your actual question is. You've got the makings of a good question here so consider reformulating your post to make it more clear. – Lilienthal Aug 24 '15 at 8:10
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    You need to ask yourself if you want to be a wholesaler or retailer; or both. If you truly want both then you need to establish territories. Whether that's in size, location or by some other metric you need to decide whether a particular end client should go directly through you or through someone reselling your products. A large number of companies do this. Sometimes it's by brand, sometimes it's bundling. In our case we have a couple resellers and we sell direct. The market boundaries are very well defined for the resellers and ourselves. – NotMe Aug 24 '15 at 21:57
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    I made major changes to this question to better fit the site. The underlying part is a good topic. If you feel my changes are too much, use the rollback feature. – NotMe Aug 24 '15 at 22:04
  • @NotMe - I sell direct and to via resellers also, but we are both drawing clients from the same pot (companies requiring IT training). We all rank for the same keywords. My company is much smaller but is growing quite quickly. How do you go about defining your market boundaries? Can I continue to have my cake and eat it, or do I need to sever ties with the resellers who up till now have been my best clients. – superluminary Aug 24 '15 at 22:11
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    We white labelled our stuff. Our resellers gave it their own name. A few are divided based on client size, with a few tied to location. We sell at a lower price point to the resellers because they handle the full sale (we invoice the resellers), support and deployment. If a company within a region we've given to a reseller contacts us directly, we send them to the reseller. Think of resellers are just additional sales people. Ones you don't have to pay directly for. If they get the deal, then you win. – NotMe Aug 24 '15 at 23:13
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Short answer: Do you want the short term win or the longer term return?

We can't tell you what to do, but business is maintained by long term relationships, not the quick dollars. I would be very cautious in damaging a relationship that can bring in ongoing income.

If you are prepared to risk any future relationship with Y, then by all means take it, but be prepared to lose perhaps far more than the value of this windfall now.

  • I want the ethical solution. As my business expands, this type of situation will likely come up more and more often. Is it ethical to pitch for the work, or should I step away. – superluminary Aug 23 '15 at 21:38
  • Bearing in mind that A is not aware of my relationship with Y. – superluminary Aug 23 '15 at 21:41
  • Ethically, I would not damage the relationship with Y and it can also potentially damage your reputation in the wider market. It potentially sees you as a risk for doing it to someone else in future. Again, we can't tell you what to do, but bypassing a long term partner wouldn't be the first thing I'd do. – Jane S Aug 23 '15 at 21:45
  • What you describe isn't a case of ethics though – Donald Aug 25 '15 at 2:08
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    @Ramhound I don't think you can answer it specifically from the perspective of ethics as much as how could it impact future business to step around a reseller and go directly to the company. Reading between the lines, this is really the point of the OP's question. – Jane S Aug 25 '15 at 2:12

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