For a micro-ISV, selling to businesses can be more lucrative than selling to consumers. Instead of making a few dollars per sale and hoping for thousands of sales, you sell to only a few customers, and charge much higher rates. But the rates are high for a reason. It takes more time and money to sell to businesses.
Consumers rarely read software license agreements. Most corporate customers don't read them either, but some have legal departments that must approve any agreement that the company makes, no matter how small. Your EULA will be examined with the same fervor as a billion dollar acquisition.
The license agreement's primary purpose, then, is to get past the customer's legal team quickly, because they stand between you and a sale. It helps if it is fair and well balanced at the start. That way, if they add crazy one-sided terms, you can negotiate without sounding unreasonable.
Some terms that you may be asked for:
A good software license agreement that you can re-use in a variety of situations can cost anywhere from $1000 to $5000. It pays to shop around.
A quotation looks just like an invoice, except that it has an expiry date. Sixty days ought to be long enough for the client to make a decision, even if the whole department goes on consecutive vacations.
You and your buyer have patiently waited for five months for the company's legal team review your license. Now, the signed copies have been faxed (yes, faxed!) back and forth. At last, they'll click on that Paypal button on your order page...
Think again. Once a large business has agreed to buy your product, you are expected to send it to them for free. They do not have to pay you a dime until they feel like it. Instead, they will send a purchase order.
The good news is that purchase orders are a legally binding promise to pay you, after all of the terms have been fulfilled. Here is a diagram to illustrate the procedure:
If you are lucky, they will use PDF files for the purchase order and invoice. But you will probably have to send and receive some more faxes.
Sometimes, after everything is agreed, you'll be asked to perform some kind of insanely complex invoicing procedure. The instructions are laced with stern, upper case warnings that if the invoice doesn't follow the proper format, lacks item category labels (found in document B), or is submitted during the wrong hours, it will be ignored.
If you have priced your product appropriately it will be worth it to spend a few hours to learn their codes and procedures. If the price is too low, you can try your luck and (politely) ask if there are any other options. (Do not mention why!)
Many companies have a policy against using Paypal. It's best to use an old fashioned check if you can. You can suggest, but never insist on a method of payment. Money is money! Some international customers only use bank transfers. If so, call your bank for the information that you need to provide them, and expect about $30 of the payment to go to fees.
Imagine you are asked to buy some software from, say Adobe.
Now imagine you have to do this for 1000 different items, at 1000 different web sites. It gets to be a very large job. Some companies have outsourced their procurement to resellers.
A reseller is simply an intermediary who pays you and provides the software to their client. It's also their job to ask for a discount, but there is no need to provide one. They have been told to acquire your product, and have already been paid a fee as a percentage of your price.
Selling to big companies can be frustrating. Throughout the process, it is important to stay professional and pleasant. Sometimes, it may appear that your customer is trying to screw you. Even if they are, is your job to be jovial, point it out, and assume that it is a simple oversight. It makes no business sense to throw money away because of a rude email.
Here are some of my favourite blogs on the software biz: