Thanks to the ubiquity of connectivity, the accessibility of software and the demand of the business, anyone can become a reseller for under R10 000.00.
By Henk Oliver, MD of Ozone Information Technology Distribution
Today, thanks to the burgeoning as-a-service market, the remarkable growth of connectivity across South Africa, and a business appetite for the accessibility of cloud, anyone can start their own channel business.
These factors have fundamentally changed the way people approach business and now, with a dash of business acumen and a splash of common sense, anyone can start a channel business without spending more than R10k.
The old days of heavy investment and weighty bottom lines are being steadily replaced by subscription-based services that can deliver more, for less, at greater speed. Most of the features and capabilities that the organisation needs today can be accessed online.
The need for physical goods delivered door-to-door has been replaced with the ability to simply buy what’s needed online, for a much better price. Cloud has allowed for organisations, specifically small to medium enterprises (SMEs) to bypass the costly hardware infrastructure investments that used to be required for actual business performance by simply selecting a cloud service, adapting it to suit their budgets and requirements, and hitting Start.
This ubiquity allows for a sole trader to build a professional business with anything from a cloud-based receptionist service to an eCommerce store and delivery network without having to even leave their desk.
This model of business can be just as easily applied to the channel. Most partners or vendors have a reseller model that’s based online and that allows you to build your own business by selling and buying their services across security, cloud storage, server infrastructure and more.
You can manage every aspect of this business and these services online and most vendors don’t ask the resellers for money upfront or for a hefty deposit. Not anymore. Most allow for you to pay as you go. You don’t need to buy in advance and then resell the products onto the market, taking on the risk of stock and loss as you do so. This not only significantly lowers the barrier to entry in terms of investment but it is one of the primary benefits of these subscription-based models.
Of course, there are some challenges that have to be overcome. While anyone could go online and start their own reseller business, there are still limitations to growth as you build your reputation, plus you do need a modicum of industry and product expertise.
Your reputation will play a role in how the vendor will initially engage with you and what payment terms you can enjoy, but as you develop your standing, this will change.
It is also advisable to focus on providing services within a specific niche or segment. For example, if you want to go into security services, stick with them, learn about the market, understand the competition and the threats, and be absolutely capable of providing your customers with high-end support and expertise.
The three biggest models on the market at the moment tend to circle around data storage solutions, security, and data recovery and backup. Each one of these has different requirements and each one has to address specific concerns in order to ensure that the service provided is the service needed. For example, if you focus on security what level of security solution will you go for? Will it just be the anti-virus for the desktop or will you do firewall subscriptions as an add-on to provide deeper business security and support?
You also have to know precisely what the vendor will provide and what they will not, and you need to know exactly where your responsibilities to the customer begin and end. Ensure that your service level agreements (SLAs) are in place and that they detail precisely where your involvement begins and ends – the last thing your reputation or business will need is a law suit or a disastrous breach that has somehow become your responsibility.
Fortunately, most vendors have draft SLAs that resellers can use to ensure that both you and your client are protected.
As a reseller it is critical that you have full access and visibility into your level of access to data and how the business is compliant with regulations as outlined by POPIA and GDPR. You do not want to be held responsible for an employee of a customer leaking data that is held liable under these regulations.
Be prepared, know your role, and ensure that all of your clients understand this just as clearly.
While arguably one of the best platforms for building a robust as-a-Service business is in data storage, it is also the area that few people consider when it comes to compliance, regulation and fines.
If you do opt into this service, ensure that you are protected or the law will be applied to your business just as ferociously as it is being applied to your customer’s business. This has already happened to businesses overseas – it is not the as-a-Service boogeyman.
Finally, consider taking advantage of some of the latest trends in this market as a stepping stone for launching the business. Currently, full collaboration online systems are becoming incredibly popular.
These provide the business with comprehensive customer relationship management tools but, instead of sitting onsite and costing in infrastructure and staffing, these are completely online with agile features and capabilities. They are a growing market and an opportunity for the entrepreneurial reseller to climb on board the as-a-Service train and really build a successful business. And still for less than R10k startup costs.