What Is Partner Margin?

Partner margin is the profit a channel partner keeps on a sale - the gap between what it pays for a product and what the customer pays it. It comes from two places: the front-end discount off list at purchase, and the back-end rebate earned after the sale once a vendor's program conditions are met.

Why it matters to IT channel partners. Front-end margin is visible on every invoice; back-end margin is not, which is why it leaks. Rebates, MDF and incentives can rival or exceed the front-end discount, but they land weeks or quarters later and only if claimed. A partner that manages only the front end is measuring half of its real margin.

How it works in vendor programs. Margins vary by partner type and value added - transactional resellers typically keep less, while value-added resellers and managed service providers that add design and services keep more. On top of that sits the back end: rebate points on eligible volume that fall almost entirely to the bottom line. Knowing the full margin - front plus back - is what lets a partner price a deal without giving away the rebate.

Where partners lose money. Treating the front-end discount as the whole margin, and never reconciling the back-end rebate, means pricing deals too thin and leaving earned rebate uncollected.

Example. A reseller quotes a deal on a 12-point front-end discount and calls it a 12-point margin. The vendor's program also pays a back-end rebate on that purchase - real profit the partner never counted, and might discount away on the next deal.

Related terms

FAQ

No. That is only the front-end margin. The full picture adds the back-end rebate and incentives a partner earns after the sale, which often make the difference between a thin and a healthy deal.

Rebates are near-pure profit added to the back end, so capturing every rebate owed raises the margin a partner keeps without selling a single extra unit.

See the real margin on every deal - front-end and rebate → Explore Rebates-On