I recently had a very interesting question asked about how the business model works when selling something through and integrator/reseller. I thought I would share the discussion (generalized) with the community.

If you look at the business from the perspective of the integrators-resellers, they may be running a classic 'platform' business. They provide the infrastructure and services for the two sides to interact, producers (product/service providers) and the consumer (end users). They are funding this platform through access fees. End users pay fees on the purchase. Product/service providers pay a 'commission' to have their items listed and accessed. Note, there may be other sources of income such as advertising, but for the purpose of this discussion the fees are the important revenue stream.

For the platform owner, if your revenue comes from transactional fees, then you must own and control the financials of the transaction and the interaction process. Think of how Uber or AirBnB operate. Whether you, as the producer, are providing a car, a bed, or an instructional course, the platform must own the interaction.

So, if we look at the business from the product/service provider's perspective, the platform is a channel for you to access customers. The platform operator is a partner providing that channel for your sales activities. That partnership comes with a cost, fees or commission on sales.

Where this scenario differs from reselling through a retail outlet is in who is the target customer.

In the retail channel you are selling to another business and they are selling to their customers. So in typical B2B sales you have two customers for whom you are required to create a value proposition - the retailer and the end user. Revenue in the reseller case can happen in a couple of ways. There could be direct sales to the reseller, then they sell direct to their customer. Or the revenue can be intermediated, which means everyone gets a share of the total selling price. You get a discounted revenue based on the reseller's commission. In the reseller scenario the company you work through is a customer of yours.

In a platform business the infrastructure gives you direct access to the end user. So you only have one customer, the end user. The platform is a only channel, for which you pay fees to access, and the controller of the interaction between you and the customer.

In the platform business the owner of the platform is a partner that comes with a cost. You have the options of showing the fee paid to the platform owner as either a cost of partnership, or you could show the sales through the platform as a separate revenue stream that is discounted by the platform's commission.

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Thank you for this information.  I bought the book Business Model Nouvelle Generation.  Great book and great business insight.  I was looking for the canvas in French.  Would you know where I could get that tool in French?  I have been looking for a few weeks now without success. I wish to download a copy and use it.  Thank you.

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