Pricing for agent channels is different
When you sell directly, your price only needs to cover costs and provide margin. When you sell through agents, your price also needs to fund commissions. This does not mean raising prices. It means structuring your pricing so that commissions are sustainable without making your product uncompetitive.
Start with your margin structure
Calculate your true cost of goods or service delivery. Then determine the gross margin available for sales, marketing, and profit. The commission you pay agents comes from this margin, not from a surcharge on top.
If your gross margin is 60%, you might allocate 15% to 20% for agent commissions, leaving 40% to 45% for other operating costs and profit. If your margin is only 20%, agent commissions need to be smaller or your pricing needs to increase.
Should agent channel prices be the same as direct?
Same price approach
Keeping prices consistent across all channels is simpler for customers and avoids channel conflict. The commission comes from your margin rather than a price premium. This is the most common approach and avoids the perception that agent customers are paying more.
Different price approach
Some businesses allow agents to quote within a price range, giving them flexibility to negotiate. The agent earns commission on the sale price, which incentivises them to sell at higher price points.
This works when your product is customisable or when deals are negotiated rather than transacted. It adds complexity but can optimise both agent earnings and your margins.
Volume discounting and commissions
If you offer volume discounts, decide how these affect agent commissions. Does the agent earn commission on the discounted price or the list price? If the agent controls discounting, do they bear the cost through a reduced commission base?
The simplest approach is to pay commission on the actual transaction price. This aligns agent incentives with your revenue.
Subscription and recurring pricing
For subscription products, consider how ongoing pricing affects ongoing commissions. If a customer negotiates a discount at renewal, does the agent's recurring commission adjust? If you increase prices, does the agent's commission increase proportionally?
Address these scenarios in your agent agreement before they arise.
Competitive pricing analysis
When setting prices for agent channels, benchmark against competitors who also use agents. Your price needs to be competitive for the customer, but your commission rate also needs to be competitive for the agent. If a competitor offers a similar product with higher commissions, agents will prioritise their product.
Pricing transparency
Agents need to quote confidently. Give them clear pricing they can access instantly: a rate card, a pricing calculator, or a simple table. If pricing requires approval for each deal, you are adding friction that slows down sales and frustrates agents.
On Zepys, you set pricing and commission rates upfront, giving agents complete clarity on what they can offer and what they will earn.