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Understanding Profit Margins for IT Resellers in the US Federal Government Market (alien.top)

submitted 11 months ago by digital-bolkonsky@alien.top to c/entrepreneur@indiehackers.space

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A question for this group: For large or small IT resellers focusing on the US Federal government, such as CDW, Carahsoft, SHI, and V3Gate, can anyone tell me what percentage the reseller company typically receives? For example, if the Federal government buys $1 billion worth of software from a reseller, what percentage do they typically receive after paying other companies?
I'm also wondering if anyone has experience in this business. What are the most challenging aspects, and are there any catches? Thanks.

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[–] LordVigilant@alien.top 1 points 11 months ago

There isn’t a set profit margin for anything I’m aware of in the retail side of IT.

Theres too many variables. Just as an example, if you are selling commits for Cloud Services, Microsoft for example, could have maximums. That means if you close a $100 million commit over 5 years don’t expect 5x more margin compared to a $20 million.

If you want to break into the tech sector I’d focus on professional services. You have more control over the cost, and can communicate the value to the customer easier with less friction compared to selling “Just another HPe” reseller.