Feedback wanted on "greater of principles" in SaaS towards B2B2B (big ones)
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We are experimenting with some new price models in our ecosystem towards re-sellers, i.e. B2B2 multipliers of our software. The feedback so far is positive. What do you think, is there anything you would consider changing in this price model idea? What don't you like, what could be an alternative to the below?
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Example: Pricing Schedule
This Pricing Schedule forms part of the agreement between Supplier and Reseller. The following terms and conditions govern the pricing and payment structure for the services provided by the Supplier.
Principle of "Greater Of"
For all pricing and payments, the Reseller agrees to pay the Supplier the greater of:
- 70% of the final sales price at which the Reseller sells the service (exclusive of VAT and taxes), or
- The minimum per-unit fee, contract guarantee, or any other fixed amounts specified below.
The Reseller is only required to pay the greater of these two options, not both. This pricing structure is designed to allow the Reseller flexibility in negotiating pricing with their customers, enabling them to optimize their pricing models while ensuring that the Supplier receives a fair and guaranteed minimum compensation.
- Revenue Share The Reseller agrees to pay the Supplier a revenue share of at least 70% of the final sales price at which the Reseller sells the service to its customers. This percentage is exclusive of VAT, taxes, or any other applicable governmental fees.
- Minimum Price Per Unit The Reseller agrees to pay the Supplier at least €[x] per unit delivered or service rendered by the Supplier’s offering. The per-unit fee is calculated on a per-usage basis, exclusive of VAT and any applicable taxes.
- Minimum Contract Duration The agreement between Supplier and Reseller shall have a minimum duration of 1 year from the effective date of this Pricing Schedule. The contract may be automatically renewed unless otherwise terminated in accordance with the terms of the master agreement.
- Minimum Annual Guarantee The Reseller agrees to provide the Supplier with a minimum guaranteed payment of €[y] per year, to be paid in monthly installments over the course of 12 months. This guarantee is payable starting in month 1 of the contract, regardless of the actual volume of services provided.
- No Setup Fees The Supplier agrees to waive all setup fees for the implementation of the services. This waiver is part of the pricing model to ensure smooth collaboration and business continuity.
- Flexibility in Reseller Pricing Models The Supplier acknowledges the importance of providing the Reseller with the necessary flexibility to determine and adjust its own pricing models for its customers. The Reseller shall have full discretion to determine the sales price to its customers, provided that the above revenue share and minimum payments to the Supplier are met.