What Are Partner Rebates? The Complete Guide to B2B Rebate Management

Let’s get one thing straight: Everyone loves cash back.  

Chances are, you have a credit card, app, or rewards card that gets you cash back when you shop at your favorite stores. They’re great for you because they save you money, and they’re great for brands because they keep you coming back for more. 

So, why wouldn’t you give your channel partners the same incentive to sell your brand? 

Partner rebates are B2B rewards programs that encourage partners to sell a brand’s products in exchange for cash back. These programs are excellent for boosting sales volume and inspiring loyalty and engagement across your partner ecosystem. 

Consider this your comprehensive guide to rebate management, including how they work, why they matter, and how to build the best program for your brand. 

Partner rebates are financial incentives that motivate a brand’s channel partners to sell their products or services in exchange for a portion of the purchase price. That means when a partner hits or exceeds the established sales target, they’ll receive money back — as long as they adhere to the brand’s predetermined rules (more on that later). 

Here’s how partner rebates work in marketing: 

1. Sell: Partners sell products until they reach the required sales target. 
2. Submit: Partners submit a claim proving they achieved their sales goals. 
3. Payout: Once the brand reviews and approves the claim, partners receive the rebate in the form of monetary payment. 

You may be thinking, “Rebates seem a lot like discounts, just with a fancier name.”  

While rebates and discounts are similar, they’re not the same thing. The main difference lies in the timing of the payout. Discounts are provided immediately at the point of purchase, whereas rebates are given well after the purchase has been made.  

So, if you gave your partners a discount on your products, the price reduction would be applied the second they made the purchase. On the other hand, if you gave your partners a rebate, they would pay full price for your products initially, then receive a portion of their money back when they eventually hit their sales target. 

The beauty of partner rebates is that you, as a brand, don’t have to give a price reduction unless your partners actually sell at a satisfactory rate — which incentivizes them to do so. Conversely, partner discounts force you to reduce the price from the get-go, taking money from your pocket without guaranteeing good sales performance.  

The only real difference between partner rebates and consumer rebates is the person receiving the price reduction. In other words, partner rebates are business-to-business (B2B), whereas consumer rebates are business-to-consumer (B2C). However, despite the difference in recipient, the process for receiving payment is essentially the same for both — the only difference is that partners must sell to earn their rebate, while consumers only have to purchase.

Using rebates in your channel marketing strategy is a great way to incentivize your partners to promote your brand. Some of the many benefits of partner rebates include:  

• Boosting sales: Because rebates come with the promise of money back, they motivate partners to go above and beyond to sell your brand’s products, resulting in greater sales performance.  
• Gaining a competitive advantage: Offering rebates gives your brand a leg-up on the competition, making partners more likely to promote your products over competitors. 
• Increasing partner engagement: Establishing a rebate program is a great way to boost partner participation in your marketing programs.  
• Prioritizing desired behaviors: You can use rebates to incentivize the behaviors you most want to see — for example, pushing specific products over others. 
• Improve partner loyalty: Rebates benefit your partners as much as they benefit you, making them more likely to continue working with your brand.  

When it comes to partner rebates, one size doesn’t fit all. Luckily, there are lots of rebate structure options you can choose from when establishing your rebate program: 

• Percentage-based rebates: In this structure, a set percentage is given back to partners based on the price or cost. Ex. Get 5% back on your total sale.
• Fixed-amount rebates: These rebates give a set amount of money back per item purchased, regardless of price. Ex. Get $10 off for each item purchased. 
• Tiered rebates: In a tiered structure, the amount of the rebate increases as partners buy more. Ex. Get a $1 rebate when you buy 1-10,000 units and a $4 rebate when you buy 10,001-20,000 units. 
• Tiered percentage-based rebates: In this tiered model, partners still receive a higher rebate the more they buy, but based on a percentage. Ex. Get 2% back on purchases up to $100,000 and 5% back when you spend between $100,001 and $200,000.
• Tiered fixed amount rebates: These rebates increase as partners buy more, with a set amount of money awarded no matter the price. Ex. Get $5 off for each item when you buy between 20,000 and 50,000 units and $10 off for each item when you buy over 50,000 units.
• Growth rebates: Growth rebates are awarded when partners sell more than the amount they sold previously. Ex. Get 2% back on all sales when you sell 1-5% more than last year. 
• Product-based rebates: You can offer extra rebates to partners when they sell a mix of different product types. Ex. Receive a bonus rebate when you sell a certain group of products together. 
• Manufacturer’s rebates: Manufacturers often offer rebates to promote specific products. Ex. Get 5% back when you promote mini excavators.  
• Volume incentive rebates: Partners can receive these rebates when they sell a large quantity within a specific timeframe. Ex. Get 4% back when you sell over 50,000 units between January 1st and March 31st.  
• Fixed cost rebates: These rebates are based on the difference between a set cost and the actual price.  

A rebate program is a brand-established incentive structure that details the rules and guidelines partners must follow to receive rebates for their sales efforts. While program rules vary by brand, they generally cover things like what amounts partners are eligible to receive, claim submission processes, and how payout is to be distributed.

When creating a rebate program for your channel partners, consider following these steps to ensure the most effective results: 

1. Establish goals: Determine the business objectives you want to achieve with your rebate program. Do you want to increase sales volume? Push a specific product? Boost loyalty? Your main goal will determine how to best structure your program. 
2. Choose a rebate structure: Now that you know what you want to achieve, it’s time to select the rebate model that best aligns with your goals. For example, if your goal is to sell more of a specific product, a manufacturer’s rebate might be your best option. 
3. Create program rules: After you’ve chosen your program structure, you’ll need to establish the rules your partners must follow to qualify for rebates. These can include things like amount eligibility, compliance standards, claims process, and payment delivery. 
4. Ensure process simplicity: If your rebate program is too complex, your partners won’t bother to participate. Make the process fast, simple, and user-friendly to ensure partner satisfaction. 
5. Communicate clearly: It’s crucial to communicate the rules and processes associated with your rebate program to ensure your partners understand it. They should also have a way to contact you if they have questions or need support.  
6. Track and adjust: Your job isn’t done after your program is up and running. Make sure to continuously monitor program performance to determine whether it’s working well or you need to make adjustments. 

If there’s one mistake you don’t want to make when managing partner rebates, it’s doing it by hand. Manual rebate management is time-consuming, prone to errors, and can lead to major compliance risks. That’s why instead of tracking rebates using spreadsheets, you should leverage rebate management software to streamline your processes.   

With a reliable rebate management platform in your corner, you can handle every aspect of rebate management easily, efficiently, and in a single location. This software is designed to automate rebate calculations, tracking, payments, and reporting to ensure accuracy and transparency. 

When choosing rebate management software for your partner ecosystem, some features are a must-have. Here are the capabilities every rebate platform should have: 

• Bulk claims submissions: The ability to upload claims in bulk streamlines high-volume processing, especially in partner programs where submission can spike at the end of the quarter. 
• Real-time reporting: You won’t get the full value from your rebate program unless you’re able to view and analyze the outcomes. That’s why you need rebate management software with reporting capabilities so you can easily assess what’s working and what’s not to inform your future marketing decisions. 
• Customization: No two partners are the same — so why should they all be limited to the same program rules? Get a platform that allows you to customize your program requirements according to your unique needs so you can get the most out of your program.  
• User-friendly interface: It doesn’t matter how high-tech your rebate management platform is if it’s too complex. Ensure partner satisfaction and efficiency with an intuitive platform that makes rebate management easy for you and your partners. 
• Integration: Your rebate management software should have the ability to seamlessly integrate with your existing systems to unify your tech stack and eliminate silos.  

As technologies grow more advanced and partner expectations shift, rebate management will likely evolve over time. The key to staying ahead of the competition is knowing what to expect. 

Here are the rebate marketing trends you’ll likely see in the coming years.

AI is sinking its teeth into practically every area of modern marketing, and rebate management software will be no exception. Automation will become the norm when it comes to rebate platforms, leveraging AI to streamline processes and eliminate the administrative burden of manual rebate management. Not only will automation maximize efficiency and reduce the risk of human error, but it will also create better user experiences for brands and their partners alike.

More and more brands are using sales data to tailor their marketing to their target audiences — and the same will be true for partner rebates. With the power of data insights, brands will be able to personalize their rebate offers to their local partners’ individualized goals and needs. As a result, partner participation in rebate programs will increase.

Partners don’t have the time or patience to switch back and forth between numerous marketing technologies. That’s why more and more rebate management platforms will have the ability to integrate into existing systems, such as omnichannel marketing platforms and customer relationship management (CRM) software. Those that lack integration features will fall behind, and partners may resort to selling for competing brands whose rebate platforms have these capabilities.

When you optimize your partner rebate program for success, you can boost sales and elevate partner engagement without lifting a finger.  

Motivate your partners to promote and sell like never before with a proven rebate management platform. Learn more about Ansira Incent, or start a conversation with one of our experts.