In one sentence
Selling to large companies can produce much higher revenue per customer, but the sale includes substantial legal, procurement, payment, and support overhead. Treat that overhead as part of the product’s cost of doing business: prepare reusable documents, set boundaries, price accordingly, and keep the relationship cordial.
Overview
Hanov walks through the less glamorous mechanics of enterprise software sales. The customer’s legal department may scrutinize a small vendor’s agreement; procurement may require formal quotes, evaluation periods, purchase orders, elaborate invoice formats, tax documentation, and approved payment methods. Resellers may add another intermediary. The article’s practical stance is that these demands are normal—not necessarily evidence of bad faith—and should be anticipated rather than fought emotionally.
The original post includes editor’s notes from Jason Cohen that add operational experience, especially about escrow, liability limits, slow evaluations, invoices submitted before purchase orders, late payments, and reseller pressure.
Core ideas
Enterprise revenue compensates for enterprise friction
Large customers may pay far more than consumers, but acquiring and servicing them consumes more time, attention, and cash. A deal is attractive only if pricing reflects this hidden labor.
Make the contract easy to approve—but not one-sided
A fair, reusable license agreement helps legal review move faster and gives you credibility when negotiating. Prepare for source-code escrow, indemnification, support obligations, refunds, and liability exposure. Use counsel to cap damages and define when indemnity applies.
A quote is an internal procurement artifact
Even when prices are public, companies often need a formal quote with an expiration date. Treat it as authoritative: discrepancies between the quote and eventual invoice can damage trust and delay payment.
Evaluations are both technical and sales milestones
Prospects may need software while legal and purchasing details are unresolved. Use time-limited evaluations and extensions as opportunities to learn what is blocking approval and to secure a concrete next step, rather than assuming the trial clock will force a decision.
A purchase order is not immediate cash
After approval, the customer may expect delivery against a purchase order and pay later. Do not invoice before receiving a valid PO if the customer’s system will reject it. Plan for delayed payment and administrative follow-up.
Procurement complexity should affect pricing
Some customers require extensive vendor registration, coding, invoice formatting, or special submission procedures. Learn the process before quoting and charge for the resulting work, presenting it as implementation or installation support rather than as a surcharge for bureaucracy.
Resellers are paid intermediaries, not automatically entitled to discounts
A reseller may handle purchasing and receive a percentage of the transaction. Hanov argues that this commission is already their compensation; the editor more emphatically warns that resellers may pressure vendors to discount without actually controlling whether the customer buys.
Professionalism is a financial tactic
Even when a customer seems unreasonable, staying pleasant protects the sale and prevents a rude exchange from destroying valuable revenue. Assume apparent obstruction may be process or oversight until proven otherwise.
Practical takeaways
- Create a standard enterprise license agreement and have a lawyer address indemnity, liability caps, escrow, support duration, refunds, and termination terms.
- If a customer wants source-code escrow, have the customer choose and pay the escrow provider where possible.
- Ask early about legal review, procurement, purchase orders, invoice requirements, vendor registration, payment timing, and reseller involvement.
- Do not assume a signed agreement means immediate payment; understand the PO-to-invoice-to-payment sequence.
- Do not send an invoice lacking the customer’s required purchase-order information.
- Build administrative, integration, and support work into the price before agreeing to a low enterprise quote.
- Use evaluation extensions to ask what technical or purchasing obstacle remains and what action will move the deal forward.
- Treat reseller discount requests skeptically; distinguish their commission from a discount taken from your price.
Caveats and counterpoints
- The article dates from May 24, 2010, and some mechanics—faxing, PayPal assumptions, and specific tax-form guidance—are dated. Current legal, tax, privacy, payment, and procurement requirements need professional or customer-specific confirmation.
- The discussion is based on micro-ISV and small-vendor experience, not a universal enterprise-sales methodology. Larger or regulated customers may impose materially different security, insurance, accessibility, data-processing, and compliance requirements.
- The tax guidance is jurisdiction-specific and should not be relied on as current tax advice. The article’s editor notes improve the practical picture but are also experience-based rather than formal legal guidance.
- The strong warning never to discount resellers is a negotiating position, not a rule. Channel economics vary; discounts may sometimes buy meaningful access, implementation, or volume.
Questions worth revisiting
- Which parts of my current sales process become expensive only after a large customer says yes?
- What contract terms would create unacceptable downside if the customer’s claim were large?
- Can I identify the customer’s legal, procurement, and payment sequence before preparing a quote?
- What price would make the administrative burden worthwhile?
- Am I treating an evaluation as a passive trial, or as a series of measurable steps toward approval?
- If a reseller requests a discount, what value and authority are they actually contributing?
Return to this when…
Return before pursuing a large-company deal, especially when you are used to self-serve or consumer sales. It is most useful as a checklist of enterprise-sale friction and a reminder to price for paperwork, delays, and risk—not as a complete modern enterprise-sales playbook.