Marketplaces – The Evolving Partnership Model for SaaS Vendors

The ones in the know have experienced the joys of partnerships, and the rewards they bring. SaaS vendors who have set up successful partnership models tell me that up to 30% of their revenue is already attributable to partnerships – sometimes a lot more.

Technical partnerships provide a solid foundation for mid-to-long term results, but have high upfront costs, and are therefore risky. They can take numerous months to close from start to finish. Quite often the requirement of engineering resources, most often the scarcest resource in any organization, is the choke point.

Service partners like agencies, implementation partners, solution providers, value-added resellers, and managed service providers provide a solid base of ongoing customer flow. However, the service partners’ priority is selling their own services, often billed on an hourly basis. Selling the vendor’s product provides incremental revenue, when convenient.

Referral partnerships. including affiliates, influencers & bloggers provide a low-risk incremental approach to new user acquisition. The setup cost is low, so there isn’t much to lose. However, there is sometimes misalignment of incentives, leading to low-quality customers with below-average LTV.

Review sites like G2 and Capterra provide great incremental exposure, but how can anyone rely upon reviews orchestrated by the vendors themselves? Nevertheless, many vendors have seen good results from such sites. Others have complained about their extremely high costs.

That brings us to marketplaces. App stores like Microsoft Appsource, Salesforce Appexchange, and Google Workspace Marketplace are technically ‘marketplaces’. In reality, they come with lots of strings attached. They are really designed to extend the ecosystem of the app store owner and enhance the adoption of their operating system or technical architecture.

NachoNacho is pioneering a new type of partnership model – a ‘true’ marketplace. The key characteristics of a true marketplace are:

* Operating system and technical architecture agnostic

* Deep & direct relationships with both buyers and sellers

* Facilitate transactions (including the flow of funds) via the marketplace

* Minimal setup costs

* Massive network effects, saving money for everyone involved

This model has great parallels in the world of B2C commerce: Amazon and eBay.

Our marketplace has afforded lower costs for both buyers (product purchase cost) and sellers (CAC) while allowing us to make some margins. So I’ll leave you with a puzzle: if buyers save money, sellers save money, and NachoNacho can also make some margin, whose wallet is all this money coming from? Get in touch with us, and we’ll promote the best answers all over the web!