O-bit buys into reseller businesses to aid growth

O-bit's reseller network scheme promises revenue growth in exchange for stake in partner's business

Sparrow: the most important thing is partnership; there is shared risk

Carrier O-bit Telecom's reseller network initiative promises to treble partners’ revenue in return for an incremental shareholding in their business.

The O-bit Local Business (OLB) scheme is looking for about 30 UK VARs. Once a reseller’s yearly revenue has grown 50 per cent, O-bit will assume a 13 per cent stake in the business.

A further 11 per cent will be taken at 100 per cent, and 200 per cent growth will see the share rise to 49 per cent. VARs can then sell up, buy back O-bit’s share, or stick with their 51 per cent slice.

Elizabeth Sparrow, sales and marketing director at O-bit, said solvent companies with a data background and turnover between £1m and £3m would make ideal recruits.

“The most important thing is partnership; there is shared risk,” she said.

Resellers will get leads, sales and marketing help, and use of O-bit’s in-house ERP software.

But Keith Humphreys, managing consultant for analyst euroLAN, claimed most firms looking to sell would opt for a clean buyout. “This is an interesting idea, but I am unconvinced resellers will go for it.”