The indirect sales model has proven to be a highly efficient and scalable approach for companies selling physical products. In this model, technology manufacturers engage with a limited number of distributors who handle logistics, inventory, and relationships with a vast network of resellers and system integrators. This system works well for one-time payments associated with physical products, where each player in the channel is specialized and focused on their role.

However, the landscape changes significantly when it comes to software licensing and recurring revenue streams. Traditionally, this model is not well-suited for managing software licenses, especially those requiring frequent renewals, as there is no effective mechanism for tracking active licenses, and the process of renewing them is cumbersome. This inefficiency is also particularly burdensome for low-value, recurring transactions, where the administrative effort can outweigh the financial gain.

For instance, renewing a $250 software license, may involve multiple steps: the end customer contacts the integrator, who then liaises with the distributor, who finally places an order with the manufacturer. This process can take days to complete, and needs to be done for every single customer, who’s licenses might all expire at a different date. This becomes even more of a sore thumb considering that the integrator may keep only a small percentage of the final amount.

Some have suggested that vendors bypass the traditional channel and sell software directly to end customers. However, this approach presents significant challenges. Software sales are often closely tied to hardware, and if the channel isn't incentivized to sell the software, it simply won’t be sold. Moreover, bypassing the channel could damage the trust that has been carefully built over years, potentially harming overall business relationships. Additionally, moving from managing a few hundred distributors to handling millions of small end-customers directly would require an entirely different operational setup, which most hardware vendors are not equipped to handle.

The Solution: Sharlic's Approach to Subscription and License Management

To address these challenges, Sharlic has developed a cloud-based platform specifically designed for subscription and license management within indirect sales models. Unlike traditional solutions, Sharlic is tailored to meet the unique needs of the full sales channel, from manufacturers to distributors, resellers, and integrators. This comprehensive approach ensures that all parties benefit from the shift towards recurring revenue models without disrupting the established flow of products and solutions to market.

Sharlic’s mission is to enable the entire channel to reap the rewards of recurring revenues. The platform automates billing and revenue sharing and simplifies the management of subscriptions and licenses. By integrating with the existing sales processes, Sharlic eliminates the inefficiencies associated with small, recurring transactions and ensures that every player in the channel is incentivized to participate in software sales.

How the Sharlic Platform Works

1. Products and Solutions Sold Exactly Like Before

Sharlic works with existing sales processed to allow products and solutions to be sold just as they have been. This ensures minimal disruption to established workflows while introducing new efficiencies.

2. Sharlic Tracks Licenses and Subscriptions

The platform tracks all licenses and subscriptions across the channel. This includes monitoring renewal dates, prices, involved sales partners, usage, and any other relevant data, ensuring that nothing slips through the cracks.

3. Invoices Sent to End Customers for Renewals

When it’s time for a renewal, Sharlic automatically invoices the end customer. This removes the burden from integrators and ensures timely payments, reducing the risk of lapses in service.

4. Vendor Notified When Payment is Received

Once a license renewal is paid, Sharlic immediately notifies the vendor to extend the license. This real-time update keeps everything in sync and ensures continuous service for the end customer.

5. Fee Division According to Margin Structure

Sharlic divides the collected fees according to the pre-established margin structure. This ensures that each stakeholder—whether it's the vendor, distributor, or reseller—receives their fair share without manual calculations or disputes.

6. Payout of Consolidated Amounts

At regular intervals, Sharlic consolidates the collected fees and pays out the appropriate amounts to each stakeholder. This streamlined process simplifies financial management across the entire channel, reducing administrative overhead that comes with many low-value transactions, and ensuring that everyone gets paid on time.

The Three Pillars of the Sharlic Platform

Sharlic’s platform is built on three core pillars that make it uniquely suited for the complexities of the indirect sales channel:

Subscription Management

Sharlic’s platform is engineered to streamline the complexities of subscription management within the indirect sales channel. It allows manufacturers, distributors, resellers, and integrators to efficiently oversee the lifecycle of software subscriptions, ensuring that licenses are consistently monitored, renewed, and billed. The platform centralizes subscription data, offering clear visibility into renewal dates, usage metrics, and customer details.

Automated Billing

Sharlic automates recurring revenue streams with minimal effort required from channel partners. The platform supports flexible billing schemes, enabling vendors and resellers to tailor billing cycles and methods to suit the needs of their customers. This automation significantly reduces the manual work traditionally involved in license renewals, ensuring that renewals are handled smoothly and efficiently without placing additional burdens on integrators or resellers.

Revenue Sharing

Sharlic facilitates automated channel kickbacks globally, ensuring that each stakeholder in the sales channel receives their fair share of the revenue. The platform provides full control of margin structures and partner terms, allowing vendors to define and adjust the revenue-sharing agreements with distributors, resellers, and integrators as needed. This automation not only simplifies the financial management process but also ensures transparency and consistency across the entire channel.

Conclusion

Sharlic offers a groundbreaking solution that brings the benefits of recurring revenue to the entire sales channel without altering the way products and solutions are traditionally brought to market. Built specifically for the channel, Sharlic’s platform automates license management, billing, and revenue sharing, making the process more scalable, efficient, and profitable for all involved parties. With its three core pillars—Subscription Management, Automated Billing, and Revenue Sharing—Sharlic is poised to revolutionize software license management in hardware-centric industries, delivering value to every participant in the channel.