Three commercial models sit behind AI tooling advice. Only one of them is obvious from your invoice. Here's what each does to your position at renewal and your exit rights, with the questions that tell them apart in one meeting.
Three arrangements cover nearly all of it. The integrator resells the license to you at a markup, the vendor pays the integrator a rebate on what you spend, or you buy the license yourself and the integrator bills only for its work.
MoneyThe integrator buys at a partner discount and invoices you a higher number. The markup is rarely itemized; it sits inside a blended day rate or a managed-service line that includes the seats.
ConsequenceYou are a subcontracted end user, and renewal is negotiated by the party whose revenue depends on it.
DetectionEasy. Ask who the agreement names.
MoneyYou sign with the vendor directly and the invoice looks clean, because it is. But the vendor separately pays the integrator a referral fee on your first-year spend, or credits it toward a partner tier carrying steeper discounts and inbound leads.
ConsequenceTier attainment is measured across the integrator's whole client book, which pushes toward standardizing every client onto one short list of vendors, whatever the fit.
DetectionHard, and most buyers never think to check. Nothing in your procurement file shows it. You have to ask, in writing.
MoneyThe license is issued to your legal entity at the price you negotiate. The integrator invoices time or a fixed fee for its own work and receives nothing from the vendor.
DetectionVerifiable. Ask for the vendor quote and check the order form.
The differences surface at renewal and at termination. Signature day looks much the same in all three. The same five questions, asked of each model.
| Resale / margin | Rebate / partner tier | Pass-through / direct | |
|---|---|---|---|
| Whose name is on the license | The integrator's, with you named as end user | Yours | Yours |
| Where the integrator's money comes from | Markup on your spend, plus services | Vendor referral fee or tier credit, plus services | Services only |
| Visible on your invoice | Partly. The bundle shows, the margin usually doesn't | No. The payment reaches none of your documents | Yes. Two invoices, two counterparties |
| Who negotiates your renewal | The integrator, on both sides of the table | You, with an adviser who is paid on the outcome | You, unassisted unless you buy that help |
| If you terminate the integrator | Licenses may need novating or repurchasing; assume a gap | Licenses continue untouched | Licenses continue untouched |
Generalized from how these agreements are commonly structured. One integrator may use different models for different products in the same proposal.
Price is the least interesting part. Ownership decides who renews the contract, what survives a termination, whether you can replace one layer without reopening a bundle, and who the vendor is obliged to answer when production is down.
Ask these in writing and keep the replies with the contract. Every one has a factual answer, and a firm with nothing to manage can give all nine in a single meeting. So vagueness is itself information.
A straight answer names entities, numbers and documents. Evasion stays at the level of intent and relationship. The distinction holds up, because the specifics are either on paper or absent.
Direct licensing is not automatically the better deal, and a firm that tells you otherwise is selling. It moves real work and real risk onto your team, and for some organizations that trade goes badly.
A rough rule: the smaller your seat count and the more consolidated your stack, the more a resale relationship earns its margin. The more layers you expect to replace over three years, the more the direct model repays its overhead. Both are defensible. Being in one without knowing it is not.
We use the third model. Every tool we recommend is licensed by the client, in the client's own legal entity name, at a price the client negotiates. Occasionally a client asks us to procure on their behalf, because aggregating through us reaches better terms than they can alone. In those cases we pass the vendor price through untouched and earn nothing on it. We hold no reseller agreements and receive no rebate, referral fee, MDF or partner-tier credit on anything we suggest. Ask us the nine questions above and we will answer them in writing.
That choice carries the costs described above. You handle the vendor management, you buy without our volume behind you, and you own the arbitration when something breaks across two products. For a smaller organization standardizing on one stack, a good reseller may cost less and be less work, and we'll say so on the first call.
If you're holding two or three integrator proposals and can't tell which model each is using, that's a short conversation and we don't charge for it.
Talk to us