GTM Navigator: Negotiating Reseller Agreements

GTM Navigator is our ongoing series where we break down the essential components of nailing the right go-to-market strategy.

In this episode, Domenica Cevallos, Investment Analyst at Fin Capital, sits down with Sheela Zemlin, Chief Operating Officer at SEW.ai, to unpack when and how founders should negotiate reseller agreements as part of their go-to-market strategy.

Drawing from two decades leading GTM teams across direct and indirect channels - including roles at Bill.com, Bakkt, PwC’s Venture Studio, and Taleo (Oracle); Sheela shares a practical framework for structuring reseller economics, preventing channel conflict, aligning incentives, and building the operating cadence (governance) that makes partnerships actually work after the contract is signed.

Key Questions Discussed:

• How do you decide between recurring subscription pricing vs. one-time/non-recurring pricing in a reseller agreement?
• How do you protect margins while still making the reseller economics attractive enough to prioritize your product?
• What incentive levers can you realistically influence if you can’t change a large partner’s comp plan—and what can move the needle
• How do you define rules of engagement to prevent channel conflict between your direct sales team and the reseller?
• What does “good” pipeline collaboration and account planning look like when CRMs aren’t integrated and data-sharing is imperfect?
• How should you approach co-marketing, joint pipeline development, and shared account planning so the partnership has real momentum?
• How do you train or certify resellers to deliver high-quality customer support without overwhelming your internal team and what partnerships work best?
• What are the biggest pitfalls founders should avoid?

Transcription (edited for clarity):

Domenica Cevallos (00:00): Welcome to the Go-to-Market Navigator by Fin Capital, our ongoing series where we break down the essential components of nailing the right go-to-market strategy. I'm Domenica, Investment analyst at Fin Capital where I work to source deals, support portfolio companies with strategic initiatives and corporate development activities. Today, I'm excited to welcome Sheela Zemlin. She's the Chief Operating Officer of SEW ai, a late-stage vertical AI software company for regulated industries. In addition to her growth focus current role, Sheela was the sales partner and customer executive at a high growth fintechs like Bakkt and Bill.com, and the go-to-market operating partner at PWC’s Venture Studio where they launched and commercialized office of the CFO solutions. She also led sales operations at HR Tech company Taleo, Oracle. Her go-to-market experience has included zero to one to scale up to IPO Journeys. Together, we'll be discussing tips and strategies on when and how to negotiate reseller agreements. Looking forward to this conversation, thanks for joining us.

Domenica Cevallos (01:06): We work with a lot of early-stage founders at Fin Capital, and they often find themselves setting up different commercial partnerships and go-to-market motions for the first time. Reseller agreements are really a key part of every founder's journey. We're really excited to have Sheela with us today to help unpack what a reseller agreement is, how it works in practice, and what best practices founders should keep in mind as they scale. Sheela, with that, we'd love to hear from you just a little bit about yourself and your background just to get things started here.

Sheela Zemlin (01:38): Sure, thanks for having me. I appreciate it. I've really built a career in the go-to-market sector first as an individual sales contributor early on and for the past 20 years or so as a go-to-market leader, both for the direct channel as well as indirect channels like resellers. As an example, I'm currently the COO of an enterprise SaaS company called SEW ai. We focus on the utility sector and provide a multi-channel customer experience platform that is used by many of the large utilities. We also have other types of embedded partnerships, systems integrator partnerships, et cetera. But today I know we're going to be talking about resellers. In my past I've led revenue at places like bill.com, actually for our portfolio companies at PWC Ventures and earlier on at a company called Taleo, which was part of Oracle ultimately. And so generally I'm looking at this from the underdog perspective, the SaaS or FinTech company that's growing and scaling and looking for a reseller who has a larger TAM and established an install base and looking for that kind of lockup. So that's what we're going to talk about today. Thank you for having me.

Domenica Cevallos (03:06): That's awesome. Thank you so much for sharing your very impressive background. We're honored to be with you today, Sheela, so thank you very much. To get things started, I think a key part of reseller agreements is just the pricing model. Sheela, why don't you tell us when negotiating a reseller agreement, how do you decide between offering recurring revenue like subscription-based pricing versus one-time non-recurring pricing models?

Sheela Zemlin (03:32): I think it really follows the product model and the revenue model of the company. As an example, in many of the companies I've worked with, we've been an enterprise SaaS platform. That's the primary revenue stream. What we're really focused on when we think about aligning the value of our company as we grow to the economics. For a SaaS company it's typically that recurring revenue, and you might ask, well, what does that look like over time, not just upfront? I think typically when we think about that sliding scale of the revenue split or the royalty share that we're getting as the ISV when it's resold on our partner's paper, I've seen anything in terms of the split from 20% to your partner all the way up to 60%. It really depends on the level of effort, not just in the original deal but throughout the customer life cycle.

You really have to think about that upfront. What is the tail of revenue going to look like over time, and how does that align to the level of effort that your team employs versus your reseller? Who's best equipped to take on those tasks? If you think about selling the deal, a complex enterprise deal, we might look to our reseller partner for sure to help us get embedded in a larger digital transformation sale that they're undertaking, but are they going to be an expert in driving adoption? Or really continuously aligning with your line of business champion in finance or customer support or wherever you're selling your product? You also must think about two or three years out in terms of the renewal cycle. Who's best equipped to take that on? So, the length of how long that royalty is valid really depends on the level of effort. Generally, I've seen that there is a revenue split up front, and then it tails off over one or two years where you're taking on most of the work.

Domenica Cevallos (05:37): That makes sense. Thank you so much. Going off of that, how do you balance protecting your company's margins while still making the economics attractive enough for resellers to prioritize your product?

Sheela Zemlin (05:58): That's a good question. I think first and foremost, in order to protect your margins, you really have to understand your margins and what you desire those to be. Over time, think about your gross margins, your net margins, as well as unit economics on the deal. From that, I think there's probably three key protections that we typically look for to negotiate into our contracts. The first is the market, that range of the market to the floor price that is allowable in a deal. And you would think about that market price being pegged off some data based on how you are selling that product through your direct channel. Also, what is the willingness to pay from your customers when you're going out there and selling through your own sales team? You might want to look at the price of your product compared to your reseller's core products.

Think about, how do those align? Typically, you're selling through a platform company and so you want to make sure that it’s balanced in terms of how much of this is the slice of the overall pie. Then something to really consider is the discounting behavior of the sales team through which your product is going to be resold. I have been surprised at some of these big tech companies - they might discount their own deals and it's sort of assumed that the discount is somewhere between 60 and 90%. If that's the case, you really have to contemplate what is a market or list pricing, and then what is your floor below which you will not go. Setting those expectations about the floor price below you, which you will not go is really important. Setting the expectations that there will be no exceptions, whether it be end of quarter or a competitive situation or maybe somebody has not done the homework, and they haven't done a great job of the narrative of your differentiators. So, we won't go below the floor because again, that's a protector of our margin. That is the first thing, to define what those are.

Now within that, there can be certain inflection points between market price and floor price. So, accelerators, if they're in the top third of that band or decelerators, if they're somewhere between the second mark and the floor pricing, there might be a decelerators. You just want to make sure that your rewarding reps, who do a great job of telling the narrative, your differentiators, what sets you apart and really getting closer to that market pricing - make sure that there's some pain for those who might not be taking the time to do that. Another key protection is ensuring that you're protecting the size of the pie. When you design your pricing, you generally have an expectation in mind that you're going to be capturing, say all of the finance users for your line of business product, or maybe you're selling a product that's sold to all employees within the enterprise, or maybe it's all meters in the service area for that utility, but being very clear about what the pricing metric is, which might be different from your resellers pricing metric for their own product, is important.

They might sell on users, you might sell on number of meters, but you want to make sure that that metric is used because if some variation or subset of that is used, it really erodes the validity of the whole pricing model. For example, if you're assuming that a deal is going to be sold to all enterprise employees, but your reseller is sort of more well versed in selling proof of concepts or a phased approach that never makes it to phase two or some subset for a business unit, it really just erodes the integrity of your pricing model. So just be really sure the pricing metric is adhered to and understood.

Then lastly, think about how many slices of the pie there are. Make sure that you define that upfront. We learned this the hard way. My past experiences where we didn't really ask the questions, we didn't contemplate what happens when this product is resold into another market like say Japan or Italy where our reseller, they may not have sufficient feet on the street or capacity themselves in that particular structure.

As an example, we were getting 60% royalty and 40% was retained by our reseller, but in that market, there was a third party, another reseller, a reseller of the reseller, and so this party took 40% off the top. If you can think about the economics, when we did the split, I assume 60% really resulted in 36% share of the total pie because of something being shaved off the top. Being really clear about what the go-to-market structure looks like in each of the segments in the markets that you're going to sell into, and just being sure that you're planning for that, is vital.

Domenica Cevallos (11:17): Yeah, that makes sense. It's important to set those expectations up front to avoid any issues as you go through the process. Tied to that as well, how do you design all these incentive structures like revenue shared tiered commissions, performance bonuses, et cetera, that align the reseller behavior with your long-term goals?

Sheela Zemlin (11:40): Certainly, you'll be able to negotiate the revenue share if you're a fintech. For example, negotiating with a big tech company, just let's say an Oracle, S&PA, NetSuite, even Intuits QuickBooks; they have incentive structures in place, comp plans. You don't want to disillusion yourself that you're going to be able to change the compensation structure of quotas or plans for those sellers. The short answer is - make sure that you're negotiating the royalty and the split really well. You might have some influence over how they compensate their reps. I would look to the top or additional special incentives that could put your product up into the number one or two slot in the reseller's mind. That is things like ensuring they have great enablement, these products are marketed well, there's enough funding in market development plans, or maybe there's a special spiff.

These are kind of like on top additional; they don't make up the core compensation plan, but they could certainly help to elevate the position in the mind if there is a Q4 spiff. Think about what those special bonuses or aligning those programs may look like. Possibly, it's a company that's been primarily on premise that's reselling your product. Maybe there are special bonuses, incentives or multipliers if they're selling SaaS products, and if your product is a SaaS product that could fall into the program, possibly your particular deal allows them to sell as a suite deal because they're selling multiple components to multiple buyers. And so ensuring that you're aligning with those programs, you understand those, so you can do some of those on the top, because bonuses midyear are really important.

I also wouldn't forget about customer incentives. In some cases, your reseller has particular programs to enhance or incentivize the end customer to migrate to their platform. Migrating to their platform could be part of the deal, where say your product is actually built on your resellers cloud platform or possibly as part of this whole digital transformation suite that they're selling your products included in here. Which means the migration credits or special incentives to the end customer to move to your resellers environment is something that you might be able to employ without spending money of your own on marketing or migration dollars for that.

Domenica Cevallos (14:30): That makes sense. We get a lot of questions around the sales process itself and the rules of engagement around the reseller agreement. So how do you define the rules of engagement with resellers to avoid this channel conflict between your direct sales team and the reseller?

Sheela Zemlin (14:50): First off, I'd be really clear upfront, think of this like a stakeholder conversation - early on to map, the sales process that exists today for your reseller and your own sales process, ensuring that you understand how deals get done. Say, maybe they have a five-stage sales process, but their sales process for their cloud transformation deals, maybe that's an 18-month sales cycle and two years to implement your product might have a three-month sales cycle and six weeks to implement. So, you really want to be clear on what the sales process and the customer journey looks like for your reseller and at what time within there would it make sense to introduce your products? As an example, on the 18-month sales cycle, you probably wouldn’t want your reseller to introduce your fintech’s higher velocity product during their discovery phase when they're just getting started.

It might weigh it down. It could be an accelerator in the deal when you're negotiating or when you get to the solutioning phase where the customer can start to unlock value in three months or six months by implementing your product as part of a larger suite. So, making sure that you understand again, how deals get done, and what the language is that's used for the sales process. You can use that in your account planning, deal reviews, et cetera. The other is in terms of rules of engagement, I would make sure that you're clear upfront that there is an expectation of regular pipeline collaboration and account planning. Odds are, you're not going to have any direct link between their CRM and your CRM. Even in 2025, these could be extracts of their pipeline that you're sharing in a protected environment and vice versa.

Which is okay, but you should just make sure that it's fresh. You're sharing those with the ability to prepare for live conversations about progressing deals and building pipeline on a monthly basis, so having that pipeline collaboration is really important.

Then I'd say the rules of engagement. This seems obvious, but it doesn't always happen, which is ensuring that you are upfront, that you're going to have a partner preference in the market for each other. That way, when their customer or prospect says, “I'm interested in getting answers on these discovery questions, changing out my payment processor” for example, and you're representing that part of the stack in your solution, you want to make sure that you're the number one partner. They might have multiple partners to be honest, but you're the number one partner in this particular deal that gets recommended, and reps understand exactly why and how your product is differentiated. The same kind of thing as the fintech, startup, or what you, will have an ability to influence deals as well, larger deals.

For example, if you hear that they might be changing their ERP stack, you would want to recommend this other player. However, what you don't want to do, and you just want to make sure that you're clear about this upfront, is that you are the preferred partner in both directions. Of course, we don't bad talk to anybody, the other player in the field - though it happens more than you would imagine, and it really is kind of unrecoverable once you do that. So in concert with that, I would have a clear line of support for the field sellers if they have a question, if there's a support issue, if they need more information – being able to ensure that they can get that in a clear and concise way. In regard to rules of engagement, oftentimes we do document these for our own selling team. I think for me culturally, it has not been the right approach to document rules of engagement and hand it over to your partner. I think it's much more about having that alignment between your two heads of sales, the champion on your overall deal and an ensuring that through that culture and behavior you're emulating that in the field.

Domenica Cevallos (19:25): Yeah, it's just building that relationship to make sure that they're both aligned on the same outcome. So, it's more about relationship building versus just having a paper of rules of engagement. Agreed, on everything – this is super interesting and very important. You already touched on this, but if you can expand a little bit, how do you approach co-marketing joint pipeline development or shared account planning to maximize mutual success?

Sheela Zemlin (19:57): I would say all of those things are critical when you're designing your partnership agreement, it's less about the agreement and more about structuring the overall vision for how you plan to be successful together in the market. It's not just the sales organization - you want to make sure that you have stakeholders identified who are going to move forward with a joint marketing plan and calendar for the year; that you have a enablement plan and you have resources on both sides to ensure that the teams are trained, enabled, and ready to step in front of customers with a joint narrative around your solutions. Some of the ways in which you do that I think are in terms of the training, taking advantage of the places where their sales team or your sales team already convene or your customers. Obviously sales kickoff at the beginning of the year, if you could do the planning in October, November, or December to ensure that your company and your product is going to be part of the messaging for their strategic themes for the reseller throughout the year, you have key executives from your organization that are on stage at the sales kickoff.

Ideally, you're even agreeing with the head of sales that there is some half day or full day of planning on targeted account planning that follows the sales kickoff. This is the time at sales kickoff when generally the sales team is receiving their updated compensation plan, their territories, and their list of accounts. So going right into the target accounts that you've identified in planning for the year and how you'll collaborate is going to be really important. The other is where else do customers convene? For example, there are large industry events. I'm sure your reseller has their own annual customer event. There's also user groups. Those are all great places where your sales organizations can collaborate to bring prospects to the events to learn, bring existing customers to share their success on stage or in round table conversations with other executives. In terms of the marketing budgets, resources, and enablement, I say make sure you've got those dollars allocated on an annual basis upfront.

It's really hard to get into the situation where you're in the third quarter and you're being asked or they're being asked to sponsor your customer event. That being said, make sure that's part of the overall plan. And so, those are some of the things around pipeline planning and development. I'd also say upfront when you're structuring the deal, ensure that you have jointly built and agreed upon a model for how you'd like this to play out over time. The high, medium, low scenarios of “what if.” Like, what if you poured fuel on the fire of marketing and demand gen and both of you invested upfront to ensure that that engine starts to kick; what if you are investing in additional sales capacity that has specialized knowledge around your sellers - you want to make sure that you know what good looks like, and you've planned for the realistic upswing in revenue that's going to follow the level of effort from sales, marketing and the other resources.

Domenica Cevallos (23:46): Interesting. That makes sense and ties really nicely into our next topic, which is around structuring the customer support for partners. I think that's something that founders really need to understand and align on before they actually start on the journey of the reseller agreement. How do you train or certify resellers to ensure they're equipped to provide high quality support without overwhelming your internal team in the process of doing so?

Sheela Zemlin (24:14): I don't think it's just one answer there. It really depends. In some cases, if you're talking about the support for your product, that's going to be sold through a suite in an ERP deal. For example, those large enterprise customers are used to a level of support and a set of digital and other support channels that they enjoy with the reseller already, right? Just say this is an S&P, NetSuite, Oracle, Pfizer of these large companies. Generally speaking, it's going to be easiest for the customer if they are able to retain those channels for ticketing and support. Then there's some backend connectivity that's thought about in advance, and this connection is made so that tickets can flow to your organization to get answers. But we're looking for our reseller generally to be the prime on support of providing the answers. They come to us with anything that might be a one-off or harder to solve.

You might be in a situation though, this is when I was just talking about, for example, a software company being resold through another larger software company. In some cases, when I worked at a fintech where we provided crypto payment rails, we were selling into banks, and they didn't have a lot of digital products that they offered. So, support for digital products, we really felt like it was best, again, for the end customer. If we handled most of those support questions that came in, which these had to do with user log on features of the product platform, how to set up users, things that are not necessarily in the support Q&A document for the customer support agents, right for the bank. We typically handled more of that, and then we've been in situations where the best scenario would be to think about how you would triage support and the type of questions and domains that you would handle versus your partner. So, it could be the first couple of tiers of support going through your partner. These are things like again, (ex: password reset), basic questions that you prepare them to answer when you come to very technical questions or requests or an escalation for maybe an outage, then these issues come and are handled by your own company. Therefore, it really depends.

Domenica Cevallos (27:08): Yeah, that's interesting. You have that first line and then the escalation, so it's interesting to see. To wrap things up, Sheela, it would be great to hear from you if you were advising another startup founder that's negotiating their first reseller agreement, what's the biggest lesson learned or pitfall to avoid?

Sheela Zemlin (27:30): In terms of advice, some things that maybe we haven't thought about upfront before, but we'd certainly do it better this next time around. One is, and it doesn't sound fun, but just building in governance into your agreement. Governance here, it sounds like a big word, but it really just means ensuring that you have a cadence. For example, to revisit topics and course correct within a framework, possibly the pricing that you're charging today becomes, there are going to be some important inputs that you need to look at such as inflation, tariffs, competitive pricing, these sort of things. You might want to revisit the idea of how you price your products on an annual basis, have that discussion, and set the pricing for the upcoming year. It could be about that. It could be about the product set.

So setting in governance for how you review and maybe qualify products to be resold by your rep. Hopefully the company that's reselling your product, they're excited about bringing additional innovations that are coming out on your own platform to market in the future and you're never going to stop innovating. Having a way to assess those products, to qualify those, and ensure that for the following years that these new skews are going to be included, that's what governance looks like, as well as just stakeholder monthly meetings to assess issues in the field, opportunities to collaborate, et cetera. Governance is one, ensuring you're building that in.

I think in terms of pitfalls, things to avoid, probably one of the most notable would be saving the PR press release, the big announcement that you've done a deal with such and such big company until you have some proof points. When you think about what really is going to move and compel other customers to consider this partnership and think, well, wow, that kind of lockup and tie up makes a lot of sense for me. It's when you hear about success from peers in the market who are using the set of products together. You may want to just wait until you have customers on the platform using it, et cetera. The same goes for, say you're a public company, and you've announced this. Institutional investors are surely going to ask in the next quarterly investor call about the success of that partnership, if you've announced it. Be sure to ensure that you're doing that at the opportune time when you have metrics to talk about, success rollout, user adoption, and all of that. Other than that, I'm happy to take questions from your team and founders as they come up and I was happy to spend some time with you today.

Domenica Cevallos (30:49): That's awesome, Sheela. Thank you so much. This was great. I feel like reseller agreements are a key part of any founder's journey, especially as they start scaling their business. I'm sure we're going to provide your contact information so founders can reach out to you, but this was extremely helpful. Thank you so much for joining us today. This was great.

Sheela Zemlin (31:10): Thank you.