Getting Maximum Discounts via Resellers: 2025 Strategies for IT Buyers
Introduction – Why Reseller Discounts Are Negotiable
Microsoft’s list prices are rarely the final word, especially when purchasing through a reseller. Licensing Solution Providers (LSPs) have built-in margins and flexibility that can be influenced by competition and timing.
In other words, the price your reseller first offers is just a starting point. Smart buyers negotiate LSP discounts by treating any “standard” discount as an opening bid rather than the best you can do. Read our overview for how you should be negotiating with Microsoft Resellers (LSPs)
Resellers operate in a competitive environment and are motivated to win your business. They often claim to give you the best deal, but behind the scenes, they have wiggle room.
By understanding how reseller pricing works and by pushing past the initial offers, IT buyers can achieve significant reseller price reductions.
The key is to be proactive, skeptical of reseller motives, and use strategic tactics to drive the price down further.
How Reseller Pricing Works
When you buy Microsoft licenses through an LSP, there’s a Microsoft-set base price and then the reseller’s cut on top of that. Typically, an LSP earns a small percentage commission from Microsoft (often just a few percent of the deal) or adds a comparable markup when billing you.
This margin is exactly where negotiation happens. One reseller might be willing to take near-zero margin (treating your deal as a loss leader) to beat competitors, whereas another might quietly add a couple of points to pad their profit.
Incentives and kickbacks also play a role. Microsoft offers resellers various bonuses tied to sales volume, Azure consumption, and the promotion of premium products. For example, an LSP might get extra rebate dollars if you commit to a big Azure spend or if they upsell you from Microsoft 365 E3 to E5.
These incentives can make a reseller more flexible on pricing: they might give you a deeper upfront discount if it helps them hit a target. In short, resellers are often balancing the discount they give you against the benefits they receive from Microsoft for your deal.
It’s important to realize that not all LSPs will quote the same price for identical products. Why do two resellers differ on pricing? One reason is simply how much margin they decide to take. If LSP A is content with a 1% margin and LSP B insists on 3%, their quotes will reflect that difference even if Microsoft’s base price is the same.
Another factor is services: some resellers bundle in “value-add” services or support with the quote, which can inflate the overall cost. Always ask for an apples-to-apples breakdown.
If one proposal seems higher, it might include extras you didn’t ask for or just a thicker markup. This is why getting multiple quotes is so powerful – it exposes any inflated pricing and pressures resellers to trim unnecessary costs.
Strategies to Maximize Discounts
To secure the largest possible discount from your LSP, you’ll need to be both strategic and assertive.
Here are key strategies to maximize savings:
- Competitive Bidding: Always involve at least 2–3 resellers in your deal process. Competitive reseller bidding forces LSPs to sharpen their pencils. When they know you’re actively comparing proposals, they’re far more likely to cut their margins or throw in extra discounts to stay in the running. The fear of losing your business is one of the strongest levers you have to drive a better price.
- Transparent Quotes: Insist on fully itemized quotes that break out unit prices, services, and any added fees. This transparency makes it easy to spot where a reseller might be padding their numbers. For example, if they lump licensing and “professional services” together, ask for a clear split. An itemized breakdown can reveal if an LSP is charging an excessive service fee or marking up certain licenses more than others. Once everything is visible, you can challenge any line item that looks overpriced or unnecessary.
- Leverage Timing: Align your negotiations with quarter-end or year-end whenever possible. Resellers (and the Microsoft reps behind them) get especially eager to close deals as financial deadlines approach. By timing your purchase or renewal for late in Microsoft’s fiscal quarter – or better yet, their fiscal year end in June – you put yourself in line for last-minute concessions. LSPs often have extra discretionary discount authority or promotions during these crunch times. Use this urgency to your advantage; the closer it is to a sales deadline, the more likely the seller is to sweeten the deal rather than risk you waiting.
- Bundle Spend Wisely: Consider negotiating multiple elements of your Microsoft spend as a package – but do so on your terms. If you’re also planning a significant Azure deployment or considering new Microsoft products, mention it during negotiations. An LSP will be keen to capture all of that business and might agree to a lower margin on the whole bundle. For instance, combining your Enterprise Agreement renewal with a new Azure commitment (or adding a batch of Microsoft 365 Copilot licenses) could motivate a reseller to reduce prices overall. Just be cautious: only bundle what you actually need and will use. The goal is to leverage your total spend to secure a better deal, rather than loading up on extras that become shelfware later.
- Service vs. License Split: Scrutinize any services the reseller proposes alongside your licenses. Some LSPs will try to make up for a deep discount on the licenses by charging more for consulting, deployment, or support services. Don’t let these add-ons go unchallenged. You can always choose to purchase services (like migrations, training, or support) from another provider or negotiate them separately. Make it clear you won’t accept an overinflated services quote as the cost of getting a good deal on the licenses. Push back and, if needed, get independent quotes for those services to keep the reseller honest.
Review your contracting options, Microsoft EA: When to Go Direct vs. Through LSP.
Key Discount Levers
The table below highlights some major discount levers and how each can play out during negotiations:
| Lever | Buyer Action (What You Do) | Typical Reseller Response |
|---|---|---|
| Competitive Bids | Solicit multiple LSP proposals | Lowers margin to avoid losing the deal |
| Azure Commitments | Tie cloud spend to realistic usage | Pushes for higher commitments to increase sale |
| End-of-Quarter Pressure | Time negotiations with vendor deadlines | Extra discounts or credits emerge late in quarter |
| Transparency Demands | Request clear license vs. service splits | Hidden margins are revealed and cut when challenged |
Pitfalls to Avoid
Even savvy negotiators can stumble into traps set by sales tactics. Be mindful of these common pitfalls when chasing the best reseller deal:
- Accepting the first “standard” discount as final. Never assume the initial discount an LSP offers is the maximum available. Many buyers take a “standard” 10% or 15% off and leave money on the table. Always counteroffer or bring in competition to see how much lower the price can go.
- Believing every urgency claim. Resellers might insist that a special price or Microsoft promotion is only available if you sign right now. While some promotions do have real deadlines, this pressure is often just a tactic to create a sense of urgency. Don’t rush a decision because a rep is pushing the clock. High-pressure ultimatums are a red flag – if a deal is good today, it should still be good tomorrow, long enough for you to properly evaluate it.
- Overcommitting for a “bigger” discount. Don’t agree to buy far more cloud usage or new product licenses (like an Azure overcommitment or every user on that new AI add-on) just to chase a bigger discount percentage. It can backfire if you don’t end up using what you paid for. Stay realistic about your needs – it’s better to negotiate a slightly smaller discount on the right amount of product than to lock yourself into paying for shelfware just to boast about a huge discount.
Insights into LSP agreements, Microsoft LSP Agreement Pitfalls: Hidden Fees and Contract Clause Risks.
Checklist – Securing the Best LSP Discounts
Use this quick checklist to ensure you’re covering all the bases in your negotiation:
- Engage at least three resellers in a competitive bidding process for any major purchase or renewal.
- Request fully itemized proposals that clearly separate licensing costs from any services or add-ons.
- Benchmark the discounts and prices against what similar organizations are getting (use peer insights or expert benchmarks if available).
- Time your negotiation milestones around Microsoft’s quarter-end or year-end to leverage any extra incentives.
- Get all negotiated discounts and special terms in writing within the contract – don’t rely on verbal promises.
FAQ – Getting Maximum Reseller Discounts
Q1: Do all LSPs have the same margin levels?
Not exactly. Most LSPs work with very slim margins (often just a few percent), but each can decide how much of that to pass on to you. One reseller might be willing to take almost no margin to win your business, while another might pad the price more, which is why quotes for the same licenses can vary between providers.
Q2: How much discount can I realistically expect?
For a well-negotiated enterprise deal, total discounts of 15–25% off Microsoft’s list prices are common. It varies by size and leverage, of course – smaller deals may see less, but even mid-sized firms often squeeze an extra 5–10% beyond the initial quote by using the tactics above.
Q3: Is competitive bidding always necessary?
It’s not absolutely mandatory, but it’s highly recommended. Even if you have a preferred reseller, getting a couple of competing quotes almost always leads to a better deal. If you truly can’t invite multiple bids, at least do some homework or informal benchmarking to ensure the offer you have is in line with market rates.
Q4: Should I reveal competing quotes to resellers?
Usually, you shouldn’t share one reseller’s exact quote with another. However, you should let each contender know that others are offering better terms. Give them a target or hint – for example, say “we have a lower price on X from another source” – so they understand what they need to beat. This wa,y you use the competitive info as leverage without necessarily handing over a rival’s paperwork.
Q5: Can Azure commitments be negotiated separately from licenses?
Yes. Microsoft allows you to handle Azure commitments separately from your licensing agreement if you want. For example, you could sign an Enterprise Agreement for your user licenses but use a separate Microsoft Customer Agreement for Azure consumption. Sometimes bundling Azure into the EA can earn you a bigger overall discount, but it’s not required. You have the flexibility to combine or separate these deals – choose the path that best meets your needs.
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