On the surface, reselling and referring appear to be the same thing. However, they are significantly distinct practices from one another. In the case of reselling, the channel partner contracts with the end customer and distributes the product or service with a margin. The money changing hands goes from end customer, to channel partner (reseller), to vendor. This means that the reseller owns the customer relationship, and often times performs the first level of customer support on behalf of the vendor. On the other hand, referral agreements are between vendor and referrer, but the vendor sells directly to the customer. The money changes hands between the vendor, which received the customer as a referred lead. Therefore, the vendor owns the customer relationship, and the contact with the customer. Sometimes, referrals happen naturally without the need for a referring agreement between vendor and referring entity. The referring entity mentions the vendor product or service because they believe it makes sense to the customer they are speaking with. Other times, there are referral fees in place which provide an additional incentive to the referring party, collecting commissions after the vendor signs its deal.