Leveling the Playing Field–Distributors Help Small Resellers Compete9 Jul, 2007 By: Camillo Sorrentino imageSource
Leveling the Playing Field–Distributors Help Small Resellers Compete
For small resellers of digital office products, competing against large
national resellers and directly with OEMs can present a daunting challenge. In a
high-ticket industry dominated by volume discounts, full-service offerings and
paper-thin margins, small resellers have traditionally been placed at a
tremendous disadvantage, often facing the likelihood of being squeezed out
before finding a leg to stand on.
Fortunately, the tide is turning and the future is looking brighter – even
for resellers with as few as three or four staff members. Help is arriving from
where some might least expect it – the distributor – who traditionally was
concerned with promoting, holding, selling and delivering product, but now is
beginning to take on an expanded role as a full-service solutions partner to
“the smaller guy.”
This concept is relatively new and it does require a level of support from
OEMs to work effectively; however, the benefits are many for all parties
involved. In a twist to what has become established as the industry norm,
distributors are beginning to extend the same deep pockets, rich inventory and
depth and breadth of experience to help level the playing field, quickly placing
small resellers on even ground with larger competitors.
How Does it Work?
For small digital office product resellers, buying in bulk to obtain volume
discounts has been largely next to impossible to date. Orders are fulfilled as
they are taken, yet housing a large inventory of expensive devices, such as six
thousand dollar network printers, is not only uneconomical but often proves to
be logistically impossible. The economics are stacked against the small reseller
from the outset and the supply chain has become increasingly difficult to
Enter the OEM and distributor. Through a certified vendor program driven by a
short application process, small resellers can receive the opportunity to become
certified channel resellers once approved – status typically reserved only for
larger resellers. This means bulk rate discounts secured by the distributor on
behalf of all certified channel resellers are passed along to the little guy,
who can then pass the savings along directly to the customer. But why would the
OEM allow this to happen when they can sell directly or even through the
distributor and cut the small reseller out of the equation?
While not overtly obvious at first take, OEMs and even distributors can
benefit greatly from this type of program. The number of large national
resellers is on the decline and the gap needs to be filled. Small retailers can
effectively penetrate regional markets and tap new channels that OEMs simply
can’t reach on their own, and this type of program makes it possible. The bottom
line: more product is moved and sold at the end of the day keeping OEMs happy.
But this is just the tip of the iceberg. In a five-year span, digital office
devices have become increasingly complex and are now commonly a standard part of
the office network (think document imaging devices that scan directly to an
employees’ email inbox). A pressing need exists for resellers to become much
more than just an extended sales function on the OEM’s behalf. Service offerings
provided by small resellers are becoming a major and invaluable component in
terms of customer service, simultaneously opening up new revenue streams for
small resellers in the process.
Case in Point
Leading manufacturers of office copier devices are increasingly relying on
small resellers to not only sell product into new organizations and channels,
but also rely on resellers to help customers maintain and service the products
once they are installed. Through its relationship with distribution partners,
manufacturers such as Sharp provide small resellers with the training needed not
only for general device maintenance and repair, but also for networking the
devices into the office place.
Distributors, including New Age Electronics, are uniquely positioned to push
the training envelope. The process is fairly straightforward in that the OEM
trains the distributor once, and the distributor then trains all of the small
resellers throughout the network. In this model, after participating in several
training sessions hosted by the distributor, the reseller is recognized as a (in
this case, Sharp) certified technician and can advertise its standing to
customers, leveling the playing field against larger competitors.
Notably, the networking element, while important, has been overlooked in the
document imaging space due in large part to the rapid evolution of imaging
devices. The networking component came on so quickly that technicians simply
have not kept pace. Through training provided by distributors, small resellers
of such devices are now able to fill this crucial service component.
Furthermore, resellers can call on distributors for additional support, with
distributors remaining behind the scenes in the eyes of the customer. From their
perspective, they are receiving outstanding service directly from the reseller.
Sweetening this deal, distributors are making parts/supplies available to
further help the reseller expand their service offerings.
Indeed, prospects are looking up for small resellers who are now advertising
their offerings as that of a certified channel partner as well as a certified
factory technician, qualified to offer competitive pricing in addition to
full-service pre and post-sale support. The time is now for resellers to push
the envelope and make this compelling business model an industry-wide reality.
They’ll just need a little help from their OEM and distributor friends in the
Camillo Sorrentino is Service Manager & Technical Trainer at New Age
Electronics, a sales & supply chain solutions innovator providing document
solutions manufacturers’ with a broad offering of logistics, distribution and
remanufacturing services. www.newageinc.com.