Reselling Microsoft 365: a plain guide to CSP in 2026

To resell Microsoft 365 in 2026 you join Microsoft's Cloud Solution Provider (CSP) programme as an indirect reseller and buy licences through an authorised distributor. Buying straight from Microsoft, called direct bill, is not open to newcomers: it needs 12 months of history as an indirect reseller and USD 1 million in trailing-twelve-month CSP revenue (Microsoft Learn, page dated May 2026).

The rest of this guide covers what each route requires, how subscription terms and cancellation work, what the licences cost at list, what is and is not known about margins, and the mistakes that cost resellers money.

The two CSP models: indirect reseller and direct billCopy Anchor Link

CSP has two models, and a new reseller can only start in one of them. Microsoft's programme overview names them as "the indirect model and the direct-bill model" and states that "eligibility for direct bill status requires that you transacted as an indirect reseller for the previous 12 months."

Sources for the table: CSP programme overview (May 2026), direct-bill requirements (updated May 2026) and indirect reseller eligibility requirements (June 2026).

What an indirect reseller needsCopy Anchor Link

The entry list is short. Microsoft asks for three things: an active membership in the Microsoft AI Cloud Partner Program with a Partner Location Account ID for the country you sell in, the ability to sign legal agreements for your organisation, and a partnership with an authorised distributor. All CSP partners must also pass business verification and be vetted annually.

Staying authorised has its own conditions. As of June 2026, an indirect reseller must record "at least USD $1,000 in CSP transactional revenue during the preceding 12 months" at the Partner Location Account level, enforce multifactor authentication for every admin user in the CSP tenant, name a security contact and accept the indirect reseller partner agreement. Microsoft can send warnings roughly 90, 60 and 30 days before your onboarding anniversary month, and if the requirements are still unmet 30 days after it, "deauthorization proceedings will begin".

What direct bill demandsCopy Anchor Link

Direct bill is a status for established CSP businesses, not a starting point. On top of the 12-month history and the USD 1 million revenue floor, Microsoft requires a passing score on a capabilities assessment covering billing, provisioning, support, compliance and security, at least one managed service or own solution, a Solutions Partner designation and a paid Advanced or Premier Support for Partners plan. The price of those support plans was not found on a page we could open.

The status is also re-earned every year. Since October 2025 Microsoft has run annual reassessments in each partner's onboarding month. A partner that fails must move to indirect reseller status and "wait one year to reapply for direct bill status".

For a new reseller the model is fixed, so the open decision is which distributor to use.

New Commerce Experience terms and the seven-day windowCopy Anchor Link

Under the New Commerce Experience (NCE), a licence-based subscription can be cancelled or reduced only in the first seven calendar days. Microsoft's policy reads: "Prorated refund within seven calendar days of purchase" (page updated September 2025), and "the cancellation window doesn't reopen until the subscription itself renews into a new term." Seat reductions follow the same rule. Microsoft's subscription guide says the licence count "can be decreased only within the first seven days of when the licenses were added to the subscription" (page dated August 2026), whether they were added at purchase, at renewal or mid-term.

After day seven, the term is a debt. Microsoft states that "the partner is responsible for payment of any outstanding amounts regardless of whether the customer can't pay or refuses to pay", including when the customer goes bankrupt. The same guide states that after the window "the partner is billed for the full term even if the customer stops paying for or using the subscription". If you sell a 50-seat annual subscription and the customer disappears in month three, you still owe the rest of the year.

The term you pick sets both the price and the risk. Pax8, a CSP distributor, describes the options and premiums this way in its NCE guide (published January 2025). We could not open a Microsoft-hosted page stating the two percentages, so treat them as distributor-reported.

Pax8, a distributor, summarised the 2025 changes to the New Commerce Experience for CSP partners. Screenshot of pax8.com, taken on 7 October 2026.

Three-year terms also exist for some enterprise products. Pax8's January 2025 guide limited them to eligible Dynamics 365 products, but Microsoft's July 2026 promotion list shows both one-year and three-year CSP offers for Microsoft 365 E3, Microsoft 365 E5 and Microsoft 365 Copilot.

Microsoft's own advice for a customer you are unsure about is blunt: sell "a monthly term subscription option that allows for subscription cancellation at the end of any month", or do not sell to that customer.

Current list pricesCopy Anchor Link

Microsoft raised the list price of Business Basic and Business Standard on 1 July 2026. The figures below are US dollar list prices per user per month from Microsoft's licensing notice (published 16 February 2026, effective 1 July 2026). The notice shows no price change for Business Premium.

Microsoft announced price and packaging changes for Microsoft 365 that take effect on 1 July 2026. Screenshot of microsoft.com, taken on 7 October 2026.

Three details matter for a reseller.

• Existing customers move at renewal. The same notice says "existing customers remain on current pricing until renewal". A customer whose annual term renews in March 2027 will see the increase then, and you should tell them before it lands.
• Prices vary by market. Microsoft announced "a global price update to these suites across all purchasing channels effective July 1, 2026" (4 December 2025), and the licensing notice adds that pricing "may vary by country and currency". Local-currency lists are separate from the US dollar figures above.
• Copilot is a separate line. Microsoft 365 Copilot Business lists at USD 21.00 per user per month for up to 300 users (4 December 2025), and since 1 July 2026 there are bundled plans such as Business Standard with Copilot at USD 23.50 and Business Premium with Copilot at USD 32, each with a 300-licence cap on an annual subscription billed annually.

These are list prices. Your buy price as an indirect reseller comes from your distributor's price list, which is not public.

Margins: what is published and what is notCopy Anchor Link

Microsoft does not publish a public base CSP margin for Microsoft 365; its October 2026 announcement points distributors and direct-bill partners to a gated guide for rates. We found no primary source for the percentages repeated in blog posts and are not repeating them here. What can be sourced is this:

• The baseline incentive is gone for indirect resellers. According to Pax8's summary of the FY27 incentives (posted 28 July 2026), the Microsoft 365 Core incentive paid 3.75% in FY26 and is no longer available to indirect resellers in FY27, effective 1 July 2026. The same post says the Growth Accelerator rate rose from 7.5% to 12.5%, but that it will "only account for growth in Strategic Accelerators Tier 1 and Tier 2". Pax8 is a distributor, not Microsoft; we could not open a public Microsoft page with these rates.
• Growth margin went live on 1 October 2026, for others. Microsoft's October 2026 announcement pays an incremental margin "on top of base margin" to "CSP direct bill partners and distributors" for qualifying growth in Copilot, Microsoft 365 E5 and E7, the Defender and Purview suites and Windows 365 Enterprise. An indirect reseller benefits only if its distributor passes some of it through.
• Base margin changed on the same day. The same announcement says "base margin also adjusts on select Microsoft 365 and Office 365 products", with rates in a gated guide. The direction and size are not public.

The practical reading: the sourced programme money in FY27 is tied to growth in specific products, not to renewals of Business Basic seats. A reseller that only passes licences through earns the gap between the distributor's price and its own. Anything beyond that comes from what you charge for migration, security, support or management. The general economics of a white-label reseller apply here as well.

Before you sign with a distributor, ask four things: your discount off list by product, whether growth margin and promotions are passed through, how you are billed and on what credit terms, and what happens to your customers if you leave.

Partner Center and its APICopy Anchor Link

Partner Center is the portal where a CSP partner manages its programme membership, agreements, customers and security requirements. It also has an API. Microsoft describes the Partner Center REST API as helping CSP partners "integrate their existing CRM or billing software with the Microsoft systems that manage customer accounts, place orders, manage subscriptions, and handle support requests." It includes webhook events.

An indirect reseller buys through its distributor, so the distributor's own ordering tools are usually the integration point; we did not find a Microsoft page that says which API an indirect reseller must use. What Microsoft does state is that API-integrated billing and provisioning is one of the capabilities assessed for direct bill.

If you build against the API, budget for maintenance. In 2026, according to Microsoft's announcements index, multifactor authentication became mandatory for Partner Center APIs from 1 April, one reconciliation API was retired on 15 March and the Check Inventory API was retired on 25 September in favour of a replacement with a new required parameter. An updated Microsoft Partner Agreement also takes effect on 1 December 2026.

Common mistakesCopy Anchor Link

Each of these follows from the programme terms described above.

1. Quoting a 72-hour cancellation window. On Microsoft's policy page, 72 hours applies to Marketplace SaaS offers; licence-based subscriptions get seven calendar days.
2. Selling annual terms to customers you have not vetted. You owe the full term after day seven. Use monthly terms for new or shaky customers and price in the premium.
3. Planning for direct bill in year one. The 12-month indirect history and the USD 1 million floor rule it out.
4. Forgetting the yearly floor. An idle reseller tenant that falls below USD 1,000 in 12 months, or lacks MFA on an admin account, can be deauthorised.
5. Building a margin model on incentives. Pax8 reports that the baseline Microsoft 365 incentive for indirect resellers ended on 1 July 2026. Model renewals on your own markup.
6. Renewing without warning the customer about price. Subscriptions bought before 1 July 2026 pick up the new list price at their next renewal.
7. Reselling to another CSP partner. Microsoft's overview says "partners can't sell online services to other CSP partners using their CSP partner tenant".

If you also sell Google's suite, the commitment rules differ; see how to become a Google Workspace reseller and the side-by-side in Google Workspace vs Microsoft 365 for resellers.

Where ResellerHQ fits, and where it does notCopy Anchor Link

ResellerHQ is a white-label reseller API with a prepaid wallet. Mailbox licences, for Google Workspace and Microsoft 365, are one of its three product lines. It is not a substitute for CSP enrolment today.

As of October 2026, mailbox licences can be ordered in the ResellerHQ sandbox only. On the live side those routes answer 422 not_available, and sandbox licences are not provisioned with Microsoft. The API lets you list plans, buy 1 to 300 seats for a customer's domain and change the seat count, with an idempotency key on each purchase. Renewal is automatic: each month the licence charges price × seats to your wallet at the price it was bought at, and a wallet that cannot pay gets one warning event and a week to top up before the licence is cancelled (mailbox licences). Pro-rated billing and assigning seats to named users are not built yet. ResellerHQ publishes no price list, so there is no margin to compare against a distributor's, and it has no live Microsoft 365 provider.

So if you need to sell real Microsoft 365 seats this quarter, sign up with an authorised CSP distributor. If you are designing a product that will order licences, domains and phone numbers through one API and one wallet, the sandbox lets you build and test that integration with test funds. The docs describe exactly what works, and prepaid wallet billing for resellers explains the billing model.