Terms
- Agent
- A party that arranges sales on behalf of a principal without taking ownership of the goods. The principal contracts with the end buyer; the agent earns a commission.
- Alliance
- A continuing arrangement in which two or more organisations coordinate work towards an agreed outcome while remaining separately owned and separately run.
- Attribution
- The problem of deciding which party's effort produced a given result when both were involved. Almost every partnership dispute about money is an attribution dispute in disguise.
- Channel conflict
- The friction that arises when a producer sells both through a partner and directly to the same buyers, so the partner is competing with its own supplier.
- Co-branding
- Presenting two identities together on one offering, so that each lends the other some of its standing with buyers.
- Co-marketing
- Joint promotion of separately owned offerings, usually with shared costs and shared audiences but no shared product.
- Consortium
- A group of parties that agree to act together on a defined piece of work, often without creating a separate company. Common where a single contract is too large for one party.
- Deal team
- The people who negotiate an arrangement. They are usually not the people who then have to operate it, which is the source of a great deal of later trouble.
- Distributor
- A party that buys stock, holds it, and resells it on its own account, taking both the margin and the inventory risk.
- Exclusivity
- A promise by one party not to make the same arrangement with others, usually bounded by territory, market segment, product line and time.
- Exit
- The agreed way an arrangement ends: notice periods, what happens to jointly created work, and which obligations continue afterwards.
- Governance
- The standing arrangements for running a partnership after signature: who meets, how often, what they decide, and how a disagreement is escalated.
- Joint venture
- An arrangement in which the parties create a separate vehicle, contribute resources to it, and share what it produces according to agreed proportions.
- Lagging indicator
- A measure that confirms an outcome after it has happened, such as revenue recognised through a partner. Reliable, but too late to steer by.
- Leading indicator
- A measure that moves before the outcome does, such as the number of partner staff trained on a product. Useful for steering, easy to game.
- Margin
- The difference between what a reselling party pays and what it charges. In channel arrangements it is the price of the route to market.
- Memorandum of understanding
- A written statement of shared intent that the parties do not intend to be fully binding. Useful for sequencing talks, dangerous when mistaken for an agreement.
- Platform
- An offering that other parties build on or sell through, where the owner sets the terms of participation for everyone else.
- Referral
- Passing a prospective customer to another party without handling the sale, usually for a fee or in expectation of reciprocity.
- Reseller
- A party that sells another organisation's product to end buyers under its own commercial relationship with those buyers.
- Scope
- The precise description of what the arrangement covers. Loose scope is the single most common defect in a partnership document.
- Sponsor
- The senior person on each side who wanted the arrangement and is accountable for it. When a sponsor leaves, the arrangement usually loses momentum.
- Term
- How long the arrangement runs, whether it renews automatically, and what triggers a review.
- White label
- An arrangement in which one party's product is sold under another party's name, with the producing party invisible to the buyer.