3rd Party Products Are As Much Work To Manage

Date: 2010.06.08 | Category: Marketing, Product Management | Tags: 3rd party,NPI,partner,product,product introduction,Product Management

Managing the  life cycle of a product your organization resales as an add-on or a complementary offering demands careful planning. You might think it is easy to partner with a 3rd party and resale their product however, it is not so. I would go as far as saying it is almost as much work as managing home-grown products.

First of all, the product needs to be evaluated in terms of fit for your customers. It may be necessary to integrate the product into your own solution and if so, the technical team must also evaluate the product. A due diligence process must be completed to ensure viability of the potential partner. If there is a good business case to proceed,  you will need to negotiate a Reseller Agreement which involves agreeing on business terms, pricing, the amount of support the partner will provide your sales, customer service and technical support teams, etc… These initial phases are a great way to get to know the partner well to ensure synergy and fit between the organizations.

Once a signed agreement is in place, you will need to manage the integration process, if required.  The product needs to be introduced to all affected department such as Sales, Marketing, Customer Service and let’s not forget the Finance/Accounting team as they must be briefed so that a billing/reconciliation processes is put in place.

Finally, if the product does not sell well, it will be necessary to go through an end of life process because the overhead required to keep it going may not be worth it.

The next time your boss or sales team wants to resell a complementary product, think about it carefully. There must exist great synergies and a good business case to move forward as it could be a lot of work for little reward!