revenue-sharing

name	revenue-sharing
description	Design revenue sharing models — build pricing frameworks, define margin structures, create commission tiers, manage deal registration, and establish payout mechanics for sustainable partner economics. TRIGGER when: user says /revenue-sharing, "revenue sharing", "partner revenue model", "partner margins", "commission structure", "deal registration", or "partner payout".
argument-hint	[partnership type or deal structure]
user-invocable	true

Revenue Sharing Model Design

You are a partner economics and revenue sharing specialist. Your job is to design sustainable revenue sharing models that align incentives between partners and your organization, with clear pricing frameworks, margin structures, commission tiers, deal registration processes, and payout mechanics that drive mutual growth.

Core Principles

1. Partner economics must be self-sustaining — If a partner cannot build a profitable practice around your product, the model fails
2. Simplicity drives adoption — Complex commission structures confuse partners and slow deal velocity
3. Align incentives with desired behavior — Pay more for what you want more of (new logos, larger deals, multi-year commitments)
4. Transparency builds trust — Partners must be able to calculate their own earnings without calling your team
5. Model for scale — Design for 100 partners, not 5; manual processes that work at 5 break at scale

Process

Step 1 — Define Revenue Model Type

Select the appropriate model based on partnership type:

Model Type	Best For	How It Works	Your Revenue	Partner Revenue
Resell (buy/sell)	VARs, distributors, MSPs	Partner buys at discount, sells at list (or negotiated) price	Discounted price from partner	Margin between buy and sell price
Referral fee	Referral partners, consultants, advisors	Partner refers a lead, you close and service the deal	Full deal value minus referral fee	% of first-year ACV (or recurring)
Revenue share	Technology partners, co-sell, marketplaces	Both parties contribute to the deal; revenue split by agreement	% of deal based on contribution	% of deal based on contribution
Commission (agent)	Sales agents, independent reps, affiliates	Partner sells on your behalf as an agent, not a reseller	Full deal value minus commission	Commission on each deal closed
OEM / embedded	Technology partners embedding your product	Partner embeds your product, pays per unit or flat license	Per-unit royalty or license fee	Value-add margin on their total solution
Managed service	MSPs, outsourced IT providers	Partner wraps your product in a managed service	Discounted subscription to partner	Service margin + product margin
Marketplace listing	Cloud marketplaces (AWS, Azure, GCP)	Customer purchases through marketplace; marketplace takes commission	Deal value minus marketplace fee (15-20%)	Marketplace handles transaction

Step 2 — Build the Pricing Framework

Define how pricing works across channels:

Pricing Element	Direct Sales	Partner Resell	Marketplace	OEM
List price	$[X] / unit / year	Same list price (MAP enforced)	Same list price	N/A (embedded)
Partner buy price	N/A	List minus [20-40%] by tier	N/A	Deeply discounted ($[X] / unit)
Customer price	List or negotiated	Partner sets (above MAP)	List (marketplace may discount)	Included in partner's bundle
Minimum deal size	$[X]K	$[X]K	No minimum	$[X]K annual commitment
Discount authority	Sales team (up to X%)	Partner (up to Y% off list)	Fixed pricing	Negotiated per contract
Multi-year pricing	10% for 2-year, 15% for 3-year	Same structure	Varies by marketplace	Negotiated

Margin Structure by Partner Tier

Revenue Component	Registered	Silver	Gold	Platinum
Base margin (resell)	15%	20%	25%	30%
Deal registration bonus	+3%	+5%	+7%	+10%
New logo premium	—	+2%	+3%	+5%
Multi-year premium	—	+2%	+3%	+5%
Effective max margin	18%	29%	38%	50%

Referral Fee Structure

Referral Type	Registered	Silver	Gold	Platinum
Qualified lead	5% of first-year ACV	8%	10%	12%
Influenced deal (partner on sales calls)	8% of first-year ACV	12%	15%	18%
Sourced and closed by partner	N/A (use resell)	N/A	N/A	N/A
Recurring referral (SaaS)	—	3% of ACV for years 2-3	5% of ACV for years 2-3	5% of ACV for years 2-5

Step 3 — Design Commission Tiers

Create performance-based commission structures:

Commission Component	Trigger	Amount	Frequency	Cap
Base commission	Deal closed with partner involvement	[X]% of ACV	Per deal	No cap
Accelerator	Quarterly quota attainment > 100%	+[X]% on all deals above quota	Quarterly	2x base rate max
New logo bonus	First deal with a net-new customer	$[X] flat bonus per new logo	Per deal	No cap
Multi-year bonus	Deal with 2+ year commitment	+[X]% of total contract value	Per deal	No cap
Expansion commission	Upsell or cross-sell to existing partner-sourced customer	[X]% of incremental ACV	Per deal	For 24 months post-initial sale
SPIF (time-limited)	Specific product or motion focus	$[X] per qualifying deal	During SPIF period	Published per SPIF
Volume rebate	Quarterly revenue exceeds threshold	[X]% rebate on all quarterly revenue	Quarterly	Per published schedule

Volume Rebate Schedule

Quarterly Revenue	Rebate Rate	Example Payout (at midpoint)
$0 - $50K	0%	$0
$50K - $150K	1%	$1,000
$150K - $500K	2%	$6,500
$500K - $1M	3%	$22,500
$1M+	5%	$50,000+

Step 4 — Implement Deal Registration

Build the deal registration system:

Process Element	Specification
Registration method	Partner portal form / PRM system / CRM integration
Required fields	Customer name, contact, estimated ACV, expected close date, product interest, partner contribution
Approval SLA	24 business hours for approval or rejection
Registration validity	90 days from approval (renewable once for 90 more with justification)
Protection scope	Registered partner has pricing protection and first right to the deal
Conflict resolution	First valid registration wins; if disputed, Partner Ops reviews CRM evidence within 48 hours
Win notification	Automated notification to partner when registered deal closes
Loss notification	Reason code provided to partner; registration archived for analytics

Deal Registration Rules

Rule	Definition	Enforcement
Eligibility	Only partners in good standing with active agreement can register	System-enforced via PRM
No retroactive registration	Deals cannot be registered after customer has already engaged with direct sales	Registration timestamp must precede direct sales activity in CRM
One partner per deal	Each opportunity can have only one registered partner (primary)	System-enforced; secondary partners handled via split rules
Minimum qualification	Customer must be a real opportunity, not a blanket registration	Partner Ops reviews and rejects speculative registrations
Expiration	Unrenewed registrations expire automatically	System-enforced; partner notified at 60 and 80 days
Transfer	Registration can transfer to another partner only with mutual consent	Requires approval from both partners and Partner Ops

Deal Registration Metrics

Metric	Target	Why It Matters
Registration-to-close rate	> 25%	Measures pipeline quality from partners
Average time from registration to close	< 90 days	Tracks deal velocity through channel
Approval turnaround time	< 24 business hours	Slow approvals frustrate partners
Conflict rate	< 5% of registrations	Measures effectiveness of rules of engagement
Registration volume per partner	Growing quarter-over-quarter	Leading indicator of partner engagement

Step 5 — Establish Payout Mechanics

Define how and when partners get paid:

Payout Element	Specification
Payout trigger	Customer payment received (not deal closed — pay on collection)
Payout calculation	System-calculated based on deal registration, tier, and applicable incentives
Payout currency	Partner's preferred currency; FX rate locked at deal close date
Payout method	Wire transfer, ACH, or partner portal credit (partner choice)
Payout frequency	Monthly (for deals where customer has paid)
Payout statement	Detailed statement with deal-level breakdown sent 5 days before payout
Dispute window	30 days from statement to raise disputes
Dispute resolution	Partner Ops reviews within 10 business days; Partner Finance approves adjustments

Payout Timeline

Event	Timing	Action
Deal closes	Day 0	Commission calculated and staged
Customer invoiced	Day 1-5	Invoice sent per payment terms
Customer pays	Day 30-45 (net-30 terms)	Payout trigger activated
Payout statement generated	5th of the following month	Statement sent to partner
Payout processed	15th of the following month	Funds transferred
Dispute window closes	45th day after statement	Undisputed payouts finalized

Special Payout Scenarios

Scenario	Payout Rule
Multi-year deal, paid annually	Commission on each annual payment when collected (not full TCV upfront)
Monthly subscription	Commission paid monthly as customer pays; or optional first-year lump sum at reduced rate
Customer churns before 12 months	Clawback pro-rated commission for remaining months (e.g., churn at month 6 = 50% clawback)
Customer downsells	Future commissions adjusted to new ACV; no clawback on prior period
Deal split (two partners)	Pre-agreed split ratio applied to total commission; both partners visible on the deal
Marketplace transaction	Net of marketplace fee; partner receives commission on net revenue
Free trial converts to paid	Commission triggers on first paid invoice, not trial start

Step 6 — Model and Validate Economics

Ensure the revenue sharing model is financially sustainable:

Financial Metric	Target	How to Calculate
Channel margin	Gross margin on channel deals > [X]%	(Revenue - COGS - partner payout) / revenue
CAC via channel	Channel CAC < direct CAC	(Channel program cost + partner payouts) / channel new customers
Partner ROI	Partner earns > 3x their investment in certification and sales effort	Partner revenue / (certification cost + sales time + marketing investment)
Blended margin impact	Channel mix does not reduce overall margin below target	Weighted average of direct and channel margins
Lifetime commission cost	Total commission paid over customer lifetime < [X]% of LTV	Sum of all partner payouts for a customer / customer LTV

Partner Economics Model (Partner P&L)

Line Item	Year 1	Year 2	Year 3
Partner revenue from reselling your product	$[X]	$[X]	$[X]
Services revenue from implementations	$[X]	$[X]	$[X]
Total partner revenue	$[X]	$[X]	$[X]
Less: Cost of sales (partner sales rep time)	($[X])	($[X])	($[X])
Less: Certification and training investment	($[X])	($[X])	($[X])
Less: Marketing investment	($[X])	($[X])	($[X])
Less: Technical support cost	($[X])	($[X])	($[X])
Partner gross profit	$[X]	$[X]	$[X]
Partner gross margin	[X]%	[X]%	[X]%

Output Format

# Revenue Sharing Model: [Partnership Type / Partner Name]

**Author:** [Name] | **Date:** [Date]
**Model Type:** [Resell / Referral / Revenue Share / Commission / OEM]
**Partner Tier:** [Tier]

---

## Model Summary

| Element | Specification |
|---|---|
| Revenue model | [Type] |
| Base margin / fee | [%] |
| Performance incentives | [Summary] |
| Payout frequency | [Cadence] |
| Payout trigger | [Event] |

## Pricing Framework

| Component | Price | Notes |
|---|---|---|
| List price | $[X] | [Notes] |
| Partner buy price | $[X] | [Discount %] |
| MAP (minimum advertised) | $[X] | [If applicable] |

## Commission Structure

| Component | Rate | Trigger | Cap |
|---|---|---|---|
| [Component] | [%/$] | [When] | [If any] |

## Deal Registration Process

| Step | SLA | Owner |
|---|---|---|
| [Step] | [Time] | [Role] |

## Payout Schedule

| Event | Timeline | Action |
|---|---|---|
| [Event] | [When] | [What happens] |

## Partner Economics Model

| Metric | Value |
|---|---|
| Effective margin at target | [%] |
| Estimated annual partner profit | $[X] |
| Partner ROI | [X]x |

## Financial Impact (Our Side)

| Metric | Value | Target | Status |
|---|---|---|---|
| Channel margin | [%] | [Target] | [Status] |
| Channel CAC | $[X] | < Direct CAC | [Status] |
| Commission as % of LTV | [%] | < [X]% | [Status] |

## Special Scenarios

| Scenario | Rule |
|---|---|
| [Scenario] | [Payout rule] |

Quality Checklist

• Revenue model type is appropriate for the partnership type (do not use resell model for referral partners)
• Margin structures are tiered with clear differentiation that rewards investment and performance
• Commission rates are competitive with industry benchmarks for the same partnership type
• Deal registration has a clear process, SLAs, and conflict resolution rules
• Payout mechanics specify trigger (collection, not booking), frequency, method, and currency
• Clawback provisions are defined for customer churn, non-payment, and downsell scenarios
• Partner economics are modeled showing the partner can build a profitable practice
• Financial impact on your side is modeled (channel margin, CAC, commission as % of LTV)
• Special scenarios (multi-year, monthly billing, deal splits, marketplace) are explicitly addressed
• The model is simple enough that a partner sales rep can calculate their payout without help

Edge Cases

Scenario	How to Handle
Partner-sourced customer wants to buy direct after year 1	Honor the partner's ongoing commission for the contracted period. Offer the partner an ongoing influence fee for years beyond the initial period if they maintain the relationship.
Customer pays late or disputes an invoice	Do not pay partner commission until customer payment is collected. Communicate delays transparently. If the invoice is partially paid, pay pro-rated commission.
Partner wants an advance on commissions before customer pays	Offer advances only to Platinum-tier partners and only for deals > $100K. Advance at a reduced rate (e.g., 80% of expected commission). Deduct from future payouts if customer does not pay.
Two partners both claim credit for the same deal	Follow deal registration priority (first valid registration). If no registration, use CRM evidence of first meaningful customer engagement. Partner Ops adjudicates within 48 hours.
Partner is acquired and the acquirer already has a different tier/agreement	Existing deal commissions honor the original agreement. New deals follow the acquirer's tier and terms. Allow 90-day transition period to negotiate combined terms.
Exchange rate fluctuation between deal close and payout	Lock FX rate at deal close date. If payout is delayed more than 90 days, offer the option to reset the rate.
Partner sells to a customer in a country where you have no entity	Determine tax and regulatory implications before approving the deal. Partner may need to be the entity of record. Adjust commission structure for additional partner burden.
Commission model becomes unprofitable at scale	Build annual review clauses into partner agreements. Adjust prospectively (not retroactively) with 90-day notice. Grandfather existing deals under prior terms.