Many small companies drift into partnerships. An acquaintance mentions you to a client, a supplier starts recommending your service, a freelancer offers to resell it. Everything is friendly until the first real deal. Then someone asks: who talks to the customer now, who sends the invoice, and does the partner still get paid when the customer renews?
A partner or reseller arrangement answers those questions before they become arguments. It does not need to be a long contract. For a small company, one page agreed in writing is a good start, and a solicitor can turn it into a formal agreement if the volume grows. This article is about the page, not the legal wording.
Partner, referrer or reseller
The three roles are different, and mixing them is the usual source of confusion.
- Referrer. Introduces a customer and steps back. You sell, invoice and support. If you only want customers to recommend you, a routine like asking customers for a referral is enough, with no partner terms.
- Partner. Works alongside you, for example delivering a complementary service. Customers may deal with both of you.
- Reseller. Sells your service under their own relationship, often invoices the customer and pays you a wholesale price.
Decide which one you are creating. The rest of the page depends on it, particularly the invoice and who the customer thinks they are buying from.
The one page: six lines
1. What the partner may do. Describe the service or product, the type of customer and the region. "Introduce and resell our monthly reporting service to retail companies with up to 50 staff" is specific enough. Say whether the partner may use your name and logo, and who approves the wording.
2. Who owns the customer. This is the line that matters most. Write it in plain words. Typical options:
- The customer belongs to the company that invoices them.
- The customer belongs to you, and the partner has a commission right only.
- The customer belongs to the partner, and you are a subcontractor.
Whichever you pick, add who may contact the customer about other services, and what happens if the customer leaves the partner. The contact data follows the same rule. Check data protection duties early: if you both hold customer details, you each have obligations, and the ICO's advice for small organisations is the right place to start. Your register of who owns the data in each business system should show the partner's records too.
3. Money. State the commission or discount as a percentage or a fixed amount, what it applies to (first invoice only, first year, every renewal), and what is excluded, such as taxes, refunds or unpaid invoices. Set when it is paid, for example 30 days after the customer has paid you, not after the order. Say what happens if the customer pays late or cancels.
4. Overlap with your own sales. Agree how to treat a customer you were already talking to. A simple rule: the partner registers each lead with you in writing, you confirm or decline within five working days, and a confirmed lead protects the partner for, say, six months. Without such a rule, the first duplicate deal will cost more than the commission.
5. Quality and conduct. The partner does not promise anything on your behalf that you have not agreed. Say who handles complaints, support and refunds. Advertising to consumers has legal rules, so check the government's guidance on marketing and advertising law if the partner will promote you publicly.
6. Ending it. Either side can end the arrangement with 30 days' written notice. State which commissions continue after the end, usually for deals closed before the notice, and for how long.
Name an owner on each side
One person at your company and one at the partner's should own the relationship. They answer questions, confirm leads and receive the review. When a partner can reach only the founder, deals wait. When nobody is named, the partner stops sending leads without saying why.
If you have more than one partner, keep a short list with the date of the agreement, the owner, the commission and the next review date. A shared table is enough. Keep partner leads visible in the same place as other sales; the point made in reconciling customers between CRM and invoicing applies here too: one customer, one record.
Start small
Do not sign a wide arrangement with a new partner. Agree a trial of three to six months with a defined goal, such as five qualified leads or two closed deals. A trial tests whether the partner understands the product, whether the customers are a good fit and whether your own team can serve the extra volume.
The yearly review
Put the review in the calendar when you sign. Once a year, or after the trial, spend 30 minutes on three numbers:
- Leads and deals brought by the partner, and how many stayed customers.
- Cost: commission paid, plus the time your team spent supporting the partner.
- Customer feedback: complaints, refunds and anything the partner said that you did not approve.
Then decide one of four things: continue unchanged, change the terms, narrow the scope, or end it. Write the decision and the date on the page. The review can sit next to your monthly operations review as one extra line.
When to involve a lawyer
A one-page arrangement is enough while amounts are small and the partner is not exclusive. Ask a solicitor to review it when the partner is exclusive, when the sums become material, when the partner handles customer money or personal data on your behalf, or when you sell to agents in other countries. Rules for sales agents are a specialised area; the government's consultation on the Commercial Agents Regulations shows how they are being discussed.
A first version this week
Take one existing or likely partner. Fill in the six lines in half an hour, send the page to them and ask what is unclear. Agree the owners and the review date, and file the signed page where the sales team can find it. If the page cannot be written because you do not agree on who owns the customer, you have found the problem early, which is the main reason to write it down.
