As revenue recognition policies become tighter, large software vendors they are looking to their partners to help them out. The blue bird sales they get, the brand new partner and the partner who last time paid them in 120 days means they cannot recognise the revenue. In the past the simple solution was to speak to your friendly partner and ask them to assist in the transaction. As the partner made additional margin everyone was happy. Many vendors are now approaching their reseller partners to ask them if they would like to become a distributor. What this means in plain English is

• A small margin for you, as all the sales work has allegedly been completed
• You own the risk on getting paid, your vendor will still demand payment
• Any fulfilment issues or problems are yours
• If the partner orders the wrong items, it’s your problem
• Can you afford to take the hit if the customer pays late or not at all

Whilst this may be good business for some people you really need to do the maths to check this is good for business. Some questions to ask yourself are 

• What is the average order size, so how much margin can I expect to make?
• How much does it cost me to process an order?
• Do I have enough man power to process these orders?
• How do I pay, or do I pay my sales team on this?