The Unique Challenges Of Redistribution Deals

*Freedom of action to transact your daily business. Ensure that factors key to your normal business operations have express consent within your deal. Avoid any part of a deal that requires you to go back to the provider for approval. Examples include market restrictions and contract language. Even if you do not anticipate entering a particular market, you may be placing unacceptable restrictions on your customer. Avoid contract language that must be replicated verbatim in your agreement with your customer.

*Clearly define obligations from your vendor to you and your vendor to your customer.

Key areas include levels of technical support and response times, cost of quality issues, release schedules, early access to products if desired, and at least equal access to products as other customers in both timing and frequency.

*Delineate the boundaries of your value-add or integration activities vs. the product. Clearly represent any incremental value you expect to receive regarding API compatibility, standards compliance, etc., and what will occur (and how) if you encounter issues during the integration phase.

*Negotiate clearly defined triggers, milestones and exits. If you are dealing with a first product release or new technology, build a pilot phase into your deal. Enable a "no commitment" exit 60 to 90 days from deal execution.

How should you approach your negotiations? First, you must understand your strategy. Create a cheat sheet of issues critical to you and your customers' success. Then decide at what point you would not do the deal (your "walk-away" position). List your ideal position for each issue. The variance between your ideal position and your walk-away position is your negotiating range. Rank these elements in order of importance, and you have outlined your negotiating strategy.

BARBARA ZUCKERWISE is a consultant, author and speaker in the areas of strategy, negotiation and partnership development. She can be reached via www.DealsThatWork.com.