Our Side Hustles Breakdown
In our tech-driven age, software solutions are omnipresent. Reselling software can be lucrative, but it’s not without challenges. Understanding licensing agreements, ensuring product legitimacy, and staying updated on software trends and needs are imperative for making it a success.
- Licensing Nuances: Reselling requires a keen understanding of licensing limitations.
- Competition: The market is dense, with many resellers and platforms offering different solutions for the same.
- Technical Support: Users might expect after-sale support or guidance, requiring you to manage an IT support team.
- Digital Ease: Being a digital product, logistics and storage aren’t concerns, making it a low-investment business to start.
- Recurring Revenue: Subscription-based software can generate consistent income for long periods.
- Worldwide Audience: Software caters to various sectors, from businesses to individual users worldwide.
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Do you have sales experience and a basic background in the SaaS industry?
There’s a lucrative opportunity waiting for you in the resale market. Reselling software can be the perfect way to turn your skill set into a profitable side hustle!
An Overview of Reselling Software
Reselling intangible products can be lucrative, but that doesn’t mean that it’s okay to sell any software you can get your hands on.
For this side hustle, you’ll license or white label the product.
The licensing approach software is straightforward, and you won’t need to change anything about the software. But if you go for a white-label product, you’ll customize the package/plan and sell it under a new name.
White-labeling is a win-win-win. The software company gets to unload the customer acquisition costs. You pocket the difference in the resale value.
The end-user? They get the added value that you sell with the software.
How Much Can Reselling Software Earn You?
Payscale estimates that the average base salary for a software reseller is $72,000.
However, your earnings will vary drastically based on the reseller model you’re following and the type of software products you choose.
Software providers tend to offer resellers a 40% “partner discount” on their on-premise products. You’ll use this 40% to cover your marketing costs, leaving you with 20% (or less) in profit.
For cloud-based products, the situation can be different. Some companies, like NetSuite, offer channel business a 100% first-year margin, but that’s not a common practice. Expect much lower margins/discounts from other software providers.
How Much Does it Cost to Start a Side Hustle Reselling Software?
It’s hard to estimate the initial investment needed for the side hustle—it depends on the product and reselling business model.
To sell white-label software, you need to buy it for a one-time fee, a monthly subscription, or a per-user rate. After that, you’ll need to spend on customizing it with your brand and marketing it. These are all expenses to consider.
You’ll also need to get permits, and those vary from one state to the other. The fees for acquiring a resale license are usually minimal and could be around $50.
Note that this resale permit doesn’t eliminate the need to license copyrighted software from the development team.
Where Can You Resell Software?
There are a few markets where you can make money selling software, including Gumroad and Amazon. As a reseller, it could be handy to build a website, too. But the question is, how do you find (and license) the software in the first place?
Where to Independently Resell Software
To become an independent reseller, pick a niche, find software creators, and discuss their licensing options.
Some larger companies have reputable software reseller programs. This approach would technically make you a “partner” rather than an independent reseller, but you would still be able to keep the project as a side hustle.
For instance, you can become an indirect reseller with Microsoft. The company’s Cloud Solution Provider program lets you sell and manage a range of products, including Microsoft 365, Dynamics 356, Azure, and even software from third-party providers.
There’s also the Google Cloud and Google Workspace reseller program. To succeed in it, add benefits and additional services (flexible contracting options, migration services, etc.). This will help you create a competitive edge and lure in potential clients.
Once you pay for the license or become a partner with a software developer, advertise the SaaS to business owners on the marketplaces.
Gig Economy Companies that Offer Gigs Reselling Software
If you don’t have enough money to license from software companies and don’t want to go through hoops to become a partner, consider working short-term for other resellers.
Look for sales gigs on platforms such as PeoplePerHour. Some sellers (and resellers) are willing to hire people to do their cold calls and client outreach.
With time, you’ll gain experience, and starting a resale business or side hustle will be easier.
Why You Should Consider Reselling Software As a Side Hustle
The B2B technology reseller sales grew by 10% in 2022, while the consumer sales in the retail channel dropped by 8%. There are various reasons why joining the rising resale-to-businesses trend is a good idea, but here are the top three ones:
- Reduced Risk: Reselling existing software reduces the risk (and the hassle) compared to developing new software from scratch and selling it.
- Pricing Flexibility: If you go for white-label solutions, you can re-price or even change the payment structure (one-time vs. subscription) to suit the market needs.
- Easier Workflow: You won’t have to worry about the logistics that come with drop-shipping tangible products.
Problems With Reselling Software for Money
While reselling software can be easier than developing and selling it yourself, the process isn’t always smooth. Here’s why:
- Legal Concerns: Your side hustle can get you in trouble if you’re not careful. To make sure it is legal, get a valid reseller’s license and avoid unauthorized software copies.
- Skill Requirements: Even if you don’t plan on providing extra services, you need to understand the software’s basics to be able to connect with your audience’s needs.
- Time Investment: The lead generation and marketing burden falls on your shoulders now.
Frequently Asked Questions
Check out the following questions if you’re still not sure if reselling software is the right pick for you:
What are the Types of Software Resellers?
We can lump software reselling business models into two broad categories: private-label and white-label. If you offer additional services with the software, you’re a value-added reseller (VAR).
These models aren’t the same as being a participant in an affiliate program, which could be an ideal solution for content creators.
Do Software Resellers Make Money?
The margins and partner discounts can be deceiving initially because you need to factor in your marketing and overhead costs. However, it’s still possible to generate recurring revenue from this reseller business.
The key is to study the market, know the software, and crunch the numbers!