Having dealt with the challenges faced by the IT channel in general and distributors in particular in cover stories spread over the past two issues of Channelwise, the “Esteemed One” has decided that the focus this month should be placed squarely on resellers.
Despite the critical role played by resellers in the IT supply chain and the acknowledgement from all concerned in the channel that they are absolutely essential to the successful delivery and installation of products, systems and solutions into the end user market, resellers are often denigrated by both vendors and distributors.
It is not uncommon for key players in the IT distribution sector to refer to resellers as nothing more than opportunistic “box droppers” – a convenient delivery mechanism for getting a wide range of commoditised products from the vendor’s factory floor, through the distributor’s warehouse and into the end user’s computing environment as quickly and as trouble-free as possible.
This unflattering reputation in the channel is often created by a perception that no self-respecting reseller will ever commit to holding any stock of their own yet expect everything to be immediately available for delivery to the customer; that there should never be any limits placed on the amount of credit extended to the reseller by all distributors; and that repayment terms start at 120 days and beyond; that all prices are entirely negotiable with additional discounts always guaranteed when the reseller plays one distributor off against the rest for the privilege of being chosen as the supplier.
Another derogatory label that is sometimes pinned on resellers is that of “bottom feeders” – most used by distributors and vendors to describe resellers who become overly reliant on their suppliers for technical support to overcome their own shortcomings when it comes to skills and the ability to solve end-user complaints when the technology fails.
The truth is that resellers are a vital and virtually indispensable cog in the wheel when it comes to serving the needs of the end user market.
Despite what they may sometimes think or claim when trying to bully and brow-beat distributors and resellers into submission in the pursuit of ever-increasing quarter-on-quarter growth in sales targets, no vendor can ever successfully build and maintain the infrastructure and resources required to address the entire potential end-user market.
The same can be said of distributors given how critical it is that they focus on core competencies such as stock management, cash flow, and logistical excellence – all key components of what was described in the last issue of Channelwise as the ability to successfully chose and address a basic business strategy based on a philosophy of “get big, get niche, or get out”.
When it comes to survival as a reseller in today’s market, there is really only one distinguishing characteristic that needs to be pursued in order to guarantee success – a total and uncompromising commitment to service excellence when it comes to addressing and meeting the needs of the end user customer.
In total contrast to any other player in the IT supply chain, resellers need to be strongly positioned as trusted, independent advisors to their customers when it comes to the selection, implementation and the ongoing servicing and maintenance of the client’s systems, applications and IT infrastructure.
This role requires massive investments in relationship management based on the ability to listen to the customer and take the time and trouble to understand what their pain points are and what is needed in order to enhance and guarantee the success of the customer’s business – regardless of the economic environment or the ever-changing technological landscape.
If this means taking up the role of nothing more than “box dropping” to help ensure that the client’s needs are taken care of in terms of a continuous and reliable supply of basic devices, peripherals or consumables at the best possible price, then so be it.
In the same way that it was generally agreed in the last edition Channelwise that the future of distribution is dependent on choosing to “get big, get niche or get out”, so too should the future of resellers be decided.
However, in this instance skills become a critical and non-negotiable differentiator for any reseller hoping to succeed. Other than, perhaps, the “big end” of the IT retail sector, pure product on its own lacks any sustainable profit opportunity – regardless of volume.
“Niche” is almost entirely dependent on skills and therefore becomes an attractive proposition that fits in perfectly with service as an offering – regardless of the underlying technology.