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Technology Services Distributor Clarus Offering 100% Partner Comp in Subscription Model

"It's the biggest no-brainer since I started this business 20 years ago," Clarus managing partner Jeff Ponts said.

James Anderson

April 30, 2023

4 Min Read
100 percent, technology services distributor
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You’ve heard about partnering with a technology services distributor. Well, what about subscribing to one?

Clarus Communications, a technology services distributor that belongs to the TDM family of companies, announced its 100% Club, which gives selling partners all vendor compensation that comes from deals in return for subscribing to Clarus. Leaders at Clarus and TDM are calling this one of the first subscription-based offerings by a TSD to technology advisors.

The premise is simple: Partners pay a $1,000 monthly subscription to Clarus and in return receive 100% of all commissions from vendors they sell with Clarus. They’ll also get upfront SPIFFs. Clarus is currently offering lifetime 10% discounts for agents that sign up at the Channel Partners Conference and Expo this week.

This program has been operating within TDM for years, even before the company bought Clarus in 2021.

“We’ve got agents that have been on the program for the last 10 years,” Bowling said.

Now the company is more widely publicizing the offer, with an eye for technology advisors who have soured over their experiences working with private equity-funded national TSDs.

TDM Robert Bowling said the model keeps selling partners centered as Clarus’ customers.

Here’s our most recent list of important channel-program changes you should know.

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TDM’s Robert Bowling

“I think that there is so much TSD momentum and press that they in a lot of ways lose sight of the sellers. And this program kind of swings the pendulum back very much in favor of the sellers,” Bowling told Channel Futures.

Tech services distributors (formerly known as master agents) historically take some portion of the residual commissions their suppliers award for deals sold. For example, a supplier might award a residual commission worth 25% of the deal it sold to the TSD, and then the TSD would “pass-through” a large percentage to the subagent. That latter percentage has grown over the years, from as low as 60% going to the subagent to upwards of 95%. In certain cases, TSDs may pass on 100% of commissions in order to hit sales and claim a SPIFF.

TSDs serve as a necessary layer for the technology advisor community, which sell a wide breadth of vendors and earn residual commissions. Most agents lack the size to safely partner with suppliers, so they turn to TSDs for contract herd immunity, as well as pre-sales support.

Benefits

With its 100% club, Clarus making revenue streams for both Clarus and the subagent more predictable, said Jeff Ponts, managing partner, West, at Clarus.

“We’re not working against them; we’re working with them. There’s no alternative thought processes here,” Ponts said. “When 100 cents on the dollar goes to somebody and we know much revenue we’re gonna make, we’re all winning with that.”

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Clarus/Datatel’s Jeffery Ponts

Ponts recently joined the TDM family of companies when TDM purchased Ponts company Datatel and merged it with Clarus. He said when he learned about Clarus’ 100% option, he felt shocked that no other companies – including his own – had tried this model.

“It’s 100% payout. We make our money on subscription. We know what our costs are. It is biggest no-brainer since I started this business 20 years ago,” he said.

Agent Adoption

Ponts said he’ll be working to bring many of the legacy Datatel partners, many of whom are MSPs, into the 100% club. He said that for most sophisticated partners, the math adds up to make the $1,000 subscription.

“If you’re a partner billing $50,000, it’s a net gain on day one,” he said.

Bowling noted that the model doesn’t fit all partners, depending on the amount of monthly recurring commissions they’re generating.

“There are transaction sellers that sell one or two circuits a month that we all have as as agents, and it never will make sense for them,” Bowling said. “But I would love for half of our agents to be part of this program.”

Ponts and Bowling told Channel Futures earlier this month that their decision to bring together Datatel and Clarus represented an opportunity to build what they are calling a “safe haven.” That safe haven would be both for regional TSDs that don’t want to sell to private equity investors and technology advisors (subagents) who want to preserve the lifestyle element of their business.

And such a program as the 100% club couldn’t exist under private equity, Bowling told Channel Futures. That’s due in part to how highly investors value the residual commissions that TSDs collect.

“I don’t have a PE firm that demands what I do with sellers or the money that comes in related to the sellers,” Bowling said. “At the end of the day, I’m in control of how the decisions get made.”

Want to contact the author directly about this story? Have ideas for a follow-up article? Email James Anderson or connect with him on LinkedIn.

 

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About the Author(s)

James Anderson

Senior News Editor, Channel Futures

James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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