Strategies for Achieving Financial Freedom as a Software Professional. Option 3: Software Reselling (Passive Income Way)
You don't have to be a highly productive developer to earn continuous passive income.
In this Strategies for Achieving Financial Freedom as a Software Engineer series:
Option 1: Working at a Promising Software Company with Share Options as a Loyal Employee
Option 2: Solopreneur / Micro-ISV / Start-up Founder: Develop your own apps.
Part 3: Software Reselling (Passive Income Way)
Clearly, the first two options entail a high level of technical proficiency. How about software professionals who are not technically excellent, such as ordinary software engineers, ordinary SDETs, software architects who can’t do hands-on coding anymore, software managers, or even business analysts? Yes, there is a way to accomplish financial freedom via reselling software.
This article explores how ambitious software professionals can achieve financial freedom by leveraging their industry connections and expertise in reselling software.
Table of contents:
· Understand Sales
∘ 1. A significant portion of wealthy individuals possess sales experience
∘ 2. Develop Software requires skills; Effective marketing requires another set of skills
∘ 3. A good Salesmen makes a whole world of difference
· New and Better Sales Model Thanks to Advancements in Technologies
∘ 1. Reach far greater customers much more easily and quickly at a much lower cost.
∘ 2. Global Market
∘ 3. Live Demo, Training, or Problem-Solving via Video Conference
∘ 4. Accumulated Growth
· Important Concept: Ongoing Passive Income
· A Story of My Insurance Broker
· Why does reselling count as professional income?
∘ An Example of Marketing WhenWise App
· The Challenges
∘ 1. The ability to see the opportunity.
∘ 2. Willing to invest some capital and time
∘ 3. Meeting the sales target
Understand Sales
Software engineers often have biases against salespeople—I used to be one of them. But I was wrong.
1. A significant portion of wealthy individuals possess sales experience
Have you noticed that some of your relatively wealthy classmates, despite not excelling academically, often had careers in sales? This has been true for my classmates, as well as those of my sister and brother. Strong sales skills can be a powerful path to wealth.
2. Developing software requires specific skills, and effective marketing demands its own distinct expertise.
A great example is Apple. Steve Wozniak designed the Apple II, while Steve Jobs focused on marketing and sales. Notably, Jobs had a strong understanding of technology and was deeply involved in design, enabling him to make many brilliant technical decisions.
In contrast, most software project managers struggle to demonstrate their own applications effectively.
3. A good Salesmen makes a whole world of difference
I once came across a saying: “If even one customer likes and purchases a product, a good salesperson can sell it to many more.” Truly exceptional salespeople, like top-tier software engineers, are rare—I have yet to meet one.
My apps—TestWise, ClinicWise, SiteWise, BuildWise, and WhenWise—all have commercial customers, with initial sales made by me. However, due to my limited focus and capability in marketing, business growth has been less than ideal. Over the years, various colleagues, customers, and friends have expressed interest in marketing these products as a side hustle. While some managed to close a few sales and earn generous commissions, none proved to be truly skilled salespeople.
New and Better Sales Model Thanks to Advancements in Technologies
1. Reach far greater customers much more easily and quickly at a much lower cost.
Imagine a door-to-door insurance salesman in the 1960s—how many deals could he close in a day? Today, a software salesperson can reach a thousand times more customers through websites, YouTube, TikTok, and other digital platforms.
2. Global Market
It's important to remember that software isn't just for English speakers—people worldwide can use it. With the growing number of users in countries like India, localization (using I18n) can make an application accessible to Chinese and Japanese speakers, unlocking a market of over a billion more potential users.
3. Live Demo, Training, or Problem-Solving via Video Conference
Post-COVID, people have become accustomed to working through video conferencing tools like Zoom, creating valuable new opportunities for sales.
4. Accumulated Growth
A satisfied customer can help spread the word about an app through word of mouth, though this process takes time. Sometimes, a major turning point—like a mention from a renowned tech influencer or adoption by a software giant—can trigger rapid growth, reducing the need for further promotion.
Impatient salespeople who prioritize quick, high commissions often fail to recognize this potential.
Important Concept: Ongoing Passive Income
Most readers have heard of “Passive Income”, which often is associated with genuine financial freedom. When something is truly great, you naturally want it to happen more often.
Check out my article, “What is Better Than Passive Income? Continuous Passive Income”
A Story of My Insurance Broker
A software contractor typically operates within a company structure, necessitating annual professional indemnity insurance. A software contractor works under the directions of the client, i.e., takes no responsibilities.
More than ten years ago, a friend recommended a relatively inexpensive insurance broker to me, with a cost of around $800 per year. After several renewals, I realized this broker’s business model is quite clever.
Approaching the renewal date, I would receive an email like the one below.
This link will take me to a basic web page with prefilled information. I just need to pay it with my credit card. Once the transaction is complete, I will receive an email containing the certificates.
Once, there was an issue (I can’t remember exactly), and the broker called me. From the conversation, he was taking a holiday in Bali.
This is a good business model, why?
High renewal rate
Virtually hassle-free
The technical implementation is very easy, with a few days of work.
Because I have done credit card payment integration before, I could implement the whole thing within a day.
I don’t know the technical capability of this IT insurance broker. He might code it himself or simply hire one IT graduate to do the work.
The focal point here isn’t the technical execution but rather the business insight in recognizing this opportunity and integrating
Become the reseller of an Insurance company
Technical Implementation of the site.
Selling Software Is Different
In a traditional salesman’s mind, they use their persuading skills (+ other tactics, legal or blurry ones) to lock a big deal and earn a decent commission. So, naturally, they want to participate in high-priced and high-margin products.
When I demonstrated TestWise IDE at international software testing conferences (2009–2013), a few people approached me for commercial cooperation every time. A common request was “raising TestWise price by 10X” (back then, a typical test automation licence price was US$5000 — $10,000) so that they could do some grey sales tricks. I declined all. (I might write a separate article on that).
However, for software apps, which are almost all on a subscription model nowadays, the price is typically $10–$50/month per seat (Microsoft 365 Personal Plan: $11/month). This does not interest traditional salesman.
Microsoft earns good money by selling its Office suite for A$11/month. Some might think it is because of the large volume. That’s true, but there is a huge overhead (think of a Microsoft Employee’s salary). For an individual who sells software subscriptions as a side hustle, simple math will reveal its great potential. Let me illustrate with an example.
An Example of Marketing WhenWise App and Earn Passive Income
Let’s say a software professional, Toby, finds the opportunity to resell the WhenWise booking app. He researched and thought reselling it would be a good side hustle. He joined as a silver partner (with little or no upfront cost), which entitled him 35% ongoing commission. WhenWise subscription is $5 per resource per month. Tony started introducing WhenWise to his friends, children’s piano teachers, tutors, tennis coaches, tennis courts, driving schools…, etc. Also, he got his family members, friends, classmates and colleagues to spread the word. A fair percentage of small businesses might have been waiting for this simple-to-use app.
Assuming Toby is getting five new sign-ups (~1 per week), an average of moderate ~10% growth by month, and an average of 4 bookable resources per business. His 6th month commission will be $270.
(100 + 110 + 121 + 133 + 146 + 160) * 0.35 = $270
Then Toby qualifies for the gold partnership and got a 50% commission. Assuming the same growth rate, the monthly commission will be $617 at the end of the first year. That is quite good for ongoing passive income, isn’t it?
Traditional salespeople often overlook small to medium-sized businesses, creating a unique opportunity. Your software knowledge becomes essential: evaluate the apps and your ability to explain them. Once you fully grasp the app's functionality, you can clearly communicate its benefits to non-technical business owners using diverse approaches. Building trust in this way can open doors to further business, like website development, SEO optimization, and beyond.
The Challenges
1. The ability to see the opportunity.
Again, traditional non-IT-savvy salesmen usually don’t realize the opportunities. For example, According to the latest MarketsAndMarkets report, “The global Automation testing market size is expected to grow USD 20.7 billion in 2021 to USD 49.9 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 19.2% during the forecast period.”
With a staggering annual growth rate of around 20% for Test Automation, numerous astute salesmen would eagerly seize this opportunity. However, the majority remain unaware of its potential. Some who come across this research paper may overlook it due to a complete lack of understanding.
My point is that strong technical knowledge can help you identify a truly promising app with significant growth potential.
2. Willing to invest some capital and time
In order to become a reseller, it’s necessary to invest some capital, which is a widely accepted requirement. Typically, the initial investment for a software business is considerably smaller compared to selling other products.
Compared to the initial capital (usually modest, ranging from a few thousand to tens of thousands), what's more important is investing time to truly understand the app. However, few do.
3. Meeting the sales target
As with any reselling agreement, salespeople must meet a minimum sales target. People often get excited and overestimate their potential to get rich quickly, but in reality, consistent effort is required to succeed at anything.
Among IT professionals who are interested in promoting my apps, most of them do not have sales expereince, therefore unable to meet the sales target (even it is set extremely low, only 5 sales per 3 months).
Another common pattern is that they give up too easily, which is understandable, given that it's just a side hustle.
My advice: do a self-assessment first. Don’t ruin a good opportunity (and your confidence when you are not ready).
For readers who are seriously interested in reselling my apps, e.g. TestWise, BuildWise Agent and WhenWise (all in passive income mode), DM me via LinkedIn.
Related reading:
A Book Changed Me to Get on the Journey to Achieve Financial Freedom
An Event Changed Me to Work for Myself: Attending One Former Colleague’s Funeral