According to a report from Statista, the global software market is expected to reach $1 trillion by 2030. With such growth comes a need for businesses to access software solutions easily. But have you ever wondered how these software products actually reach businesses? That’s where software distributors and resellers come into play.
If you’re a business looking to either distribute or resell software, understanding the difference between a software distributor and a software reseller is key. These two models seem similar, but they operate in different ways. Choosing the right one for your business can help you grow, reach new customers, and create profitable opportunities.
This blog will explore what a software distributor and a software reseller are, how they differ, and which model might be the right fit for your business. We’ll also discuss why becoming a VPN reseller could be a great choice for you and why PureVPN’s custom software reseller program is an ideal solution. Let’s dive in!
What is a Software Distributor?
A software distributor acts as a middleman between the software developer and the reseller (or sometimes directly to the end customer). Distributors are responsible for acquiring large quantities of software products from developers and selling them to various resellers or other businesses. They often have strong relationships with several software vendors, and they provide value by managing logistics and storage and sometimes even providing support for the resellers.
Software distributors typically have a wide network of resellers who rely on them to access software from different developers. They handle bulk orders and may even have regional or global rights to sell specific software.
Key functions of a software distributor:
- Bulk purchasing: Distributors buy large amounts of software licenses from developers.
- Logistics management: They ensure software products are delivered to resellers or customers.
- Support: Distributors sometimes offer technical or customer support for resellers.
- Market expansion: They help software developers expand into new markets by managing relationships with resellers across different regions.
In short, software distributors are the bridge between software developers and resellers, helping to distribute software to businesses or consumers efficiently.
What is a Software Reseller?
On the other hand, a software reseller is a company or individual that purchases software from a distributor or developer and then resells it to the end-user, typically a business or individual consumer. Software for resellers can operate under different models, such as buying the software outright and reselling it or participating in a reseller software program where they sell the software on behalf of the developer and earn a commission.
Key functions of a software reseller:
- Direct selling: Software resellers sell the software directly to end users.
- Customer relationships: Resellers often focus on building relationships with their customers to understand their needs better and offer the best solutions.
- Value addition: Some resellers operate as software value added resellers (VARs), meaning they provide additional services, such as installation, customization, or ongoing support for the software, on top of the software sale.
- Profit margin: They usually make a profit by marking up the software they purchase or through commissions from developers.
Resellers can specialize in various kinds of software, from off-the-shelf solutions to white label software to resell. For example, some businesses opt for a white label software reseller program, where they can brand the software as their own and sell it to their customers.
Key Differences Between Software Distributors and Software Resellers
When deciding between becoming a software distributor or a software reseller, it’s important to understand how these two models differ in their roles, functions, and customer interactions. Let’s break down the key differences:
1. Primary Role: Middleman vs. Direct Seller
A software distributor acts as a middleman between the software developer and resellers. Distributors purchase software in bulk from developers and then sell it to resellers. They manage the logistics of large-scale software distribution and don’t deal directly with the end-user. Their focus is on procuring, storing, and delivering software to resellers or other businesses.
In contrast, a software reseller sells directly to the end user, whether that’s a business or an individual consumer. Resellers buy software from distributors or developers and then work to match the right software solution with their customers’ needs. They are more customer-facing and often focus on building long-term relationships with clients.
2. Value-Added Services
Software distributors are primarily concerned with getting the software from the developer to the reseller. They rarely provide additional services beyond logistics and sometimes technical support for resellers. Their goal is to efficiently manage large quantities of software and deliver them to resellers or businesses in different regions or markets.
On the other hand, software resellers often provide value-added services. These services may include software installation, customization, technical support, and even user training. Resellers might offer these services as part of a value added reseller software approach, which helps them differentiate themselves in the market and build stronger relationships with their customers.
3. Profit Model
The way each party earns money also differs significantly. A software distributor makes money by purchasing software in bulk at a discounted price from the developer and selling it to resellers at a marked-up price. This bulk buying allows distributors to profit from the difference in price while resellers bear the responsibility of selling to the end-user.
In contrast, a software reseller earns money either by marking up the price of the software they buy from a distributor or by earning a commission through a reseller software program. Resellers typically operate on a smaller scale than distributors and may not need to purchase software in bulk. This allows resellers to operate with less financial risk and focus on individual sales or subscription models, like software as a service reseller agreements, which can offer a steady stream of income.
4. Customer Interaction
A software distributor doesn’t typically interact with end-users. Their primary relationships are with resellers or other large-scale buyers. Distributors focus on scaling the availability of software across multiple regions, helping developers reach a wider audience. They may provide logistical support, but customer-facing interactions are minimal.
On the other hand, software resellers are in direct contact with end-users. They are responsible for understanding customer needs, providing the right software solutions, and offering ongoing support. This direct interaction is crucial for resellers, as it helps them build trust and long-term relationships with their customers, which often leads to repeat business and upselling opportunities.
5. Scale of Operations
Software distributors typically operate on a larger scale, handling multiple products from various software developers and covering larger geographical areas. Their operations are geared toward moving large quantities of software and fulfilling the needs of various resellers across different regions.
Software resellers, however, often operate on a smaller, more local scale. They may serve niche markets or specialize in specific types of software. Some resellers may choose to join a software developer reseller program, allowing them to represent a particular developer and sell their software to customers. This smaller-scale operation enables resellers to focus on providing personalized customer service and tailored software solutions.
By understanding these key differences, you can better decide which model—distributor or reseller—aligns with your business goals and the type of customer relationships you wish to build.
How to Choose the Right Model for Your Business?
Now that you understand the differences between a software distributor and a software reseller, which model is right for your business?
Choose a Distributor Model If:
- You can buy in bulk: Distributors often purchase large quantities of software at once, which requires significant investment.
- You want to manage resellers: If you prefer to manage multiple resellers and logistics, the distributor model could be ideal for you.
- You’re looking to operate regionally or globally: Distributors often help software developers enter new regions, so if you want to work across borders, this might be your path.
Choose a Reseller Model If:
- You want to work closely with end-users: Software resellers build relationships directly with customers and can offer personalized service.
- You prefer smaller, more frequent sales: Resellers typically don’t need to buy in bulk like distributors, and they make profits on each sale or through reseller software programs.
- You’re interested in value-added services: Many software resellers also provide additional services like installation, customization, or training, which can help build long-term relationships with customers.
Why Become a VPN Reseller?
The VPN market is booming, with the global VPN market projected to reach $107.6 billion by 2027, according to a report from Global Market Insights. Businesses and individuals alike are looking for secure ways to protect their online privacy, making VPN software an essential tool.
Becoming a VPN reseller allows you to tap into this growing market without having to develop the technology yourself. You can sell VPN solutions under your brand and earn revenue while providing a service that’s in high demand.
By joining a software as a service reseller agreement, especially in the VPN space, you get access to a high-quality product, ongoing support, and the chance to offer additional value to your customers.
Opt for PureVPN’s Reseller Program
If you’re interested in becoming a VPN reseller, consider PureVPN’s custom software reseller program. PureVPN provides a complete package for resellers, including software and the option to resell software under your brand with their white label software to resell program.
With PureVPN, you get a hassle-free experience. They provide all the necessary tools, like a fully functional website and apps, to get you started. Additionally, their software reseller agreement is straightforward to understand, ensuring that you know exactly what you’re getting.
Key benefits of joining PureVPN’s white label software reseller program include the following:
- Branding: You can sell the VPN service under your brand.
- Pre-built solutions: PureVPN offers a complete website and app, so you don’t need to worry about developing your own.
- Strong market: VPN demand is on the rise, and you can be part of this growing industry.
- Support: PureVPN provides full support to its resellers, ensuring you can focus on selling without dealing with technical issues.
- Flexible reseller contracts: PureVPN offers a range of software reseller contracts, allowing you to choose the one that best suits your business model.
PureVPN’s software value-added reseller approach allows you to provide more than just the software—you can offer customers a complete privacy and security solution.
Conclusion
Deciding between becoming a software distributor or a software reseller depends on your business goals and resources. While distributors focus on large-scale software procurement and logistics, resellers work directly with end-users and often provide additional services that add value to the software products.
If you’re looking to enter a high-demand market, becoming a VPN reseller through a software reseller program is a smart choice. PureVPN’s reseller program gives you all the tools and support you need to succeed, whether you choose a white-label option or a more traditional reseller approach.