Why Use This Calculator?
To evaluate the profitability of channel partnerships versus direct sales.
Formulas
\(\text{Partner Payout} = \text{Total Deal Size} \times (\text{Partner Margin} / 100)\) \(\text{Net Revenue} = \text{Total Deal Size} - \text{Partner Payout} - \text{Internal Cost}\)
Comparison Table
| Type | Margin Range | Rep Cost | |—|—|—| | Referral | 10-15% | High | | Reseller | 20-30% | Low |
Step-by-Step Guide
- Enter the total deal size.
- Enter the partner margin percentage.
- Enter your internal sales costs.
- Review the net revenue to your business.
FAQs
What is a channel partner split?
The percentage of the deal size paid to a third-party reseller or referral partner.
What is a typical partner margin?
It ranges from 10% for referrals to 30%+ for full-service resellers.
How does this affect internal sales costs?
Partner sales should theoretically have lower internal sales costs.
Is partner margin paid on gross or net?
Usually on gross ARR, but depends on the partner agreement.
Why use channel partners?
To reach new markets and scale sales without hiring more direct reps.
What is net revenue?
The amount the vendor keeps after paying the partner and internal costs.