I hope you can forgive me a chuckle at the irony of a company in the marketing business worrying about having a channel conflict. What can go wrong? They can d

I hope you can forgive me a chuckle at the irony of a company in the marketing business worrying about having a channel conflict. What can go wrong? They can do a better job of marketing & service than you and effectively build their own brand on the back of your efforts, before dumping you for another supplier or an in-house development. I suggest you develop a reseller product and approach it as a whole new channel. You should consider whether to use push or pull marketing or whether to require co-marketing efforts linked to VAR channel discount points. Perhaps you will have minimum volume requirements and tiered pricing, with white-label option at additional cost. You should consider exclusivity requirements - on both sides, and examine the scenarios in a competitive context. Since this is effectively a revenue-sharing partnership, you should have a standard heads of agreement and standard T&Cs ready to go. Oh, and prime your accounts people for the additional reconciliation burden. In other words, you need a channel management strategy. All this puts you in a much stronger negotiating position and is much better than allowing yourself to be led into it blind by a savvy customer. If none of the above is worth the investment, don't do it at all.