Resellers are faced with a number of challenges, including tough trading conditions as a result of shrinking budgets, heightened competition and more. Accessing the volume market of the Small to Medium Enterprise (SME) is one way of increasing market share and profitability, as this market relies heavily on the expertise and support of suppliers with regards to technology solutions, says Fred Mitchell, Security Software division manager at Drive Control Corporation.
However, many resellers simply do not have the ability to maintain skilled employees or staff to manage and maintain all of the solutions available, which is limiting access to this market. Distributors can offer assistance, providing the professional skills, technical expertise and capacity for support and maintenance resellers need to tap into this highly lucrative market.
The channel market has been a challenging one for a number of years, as the ever-shrinking IT budget of enterprises erode the margins of reseller partners. In addition, finding and accessing new customers in new markets, and creating differentiators that set resellers apart from their competition is increasingly difficult, given how commoditised the market is. Further to this, in the IT space, resellers are challenged by continuously evolving technology, and this coupled with the sheer variety of different solutions available make it impossible to have certified personnel on staff for all of the different technologies. Accessing the volume SME market has thus proved difficult for many resellers.
South Africa in particular has a large and thriving SME business market, and this therefore presents significant opportunities for revenue for resellers. SMEs are often reliant on the advice, technical assistance, support and maintenance of outside IT experts, as they simply cannot justify having a full-time IT function or resources in-house. Resellers are thus in the ideal position to become trusted IT advisors, installers and maintenance providers. However, in order to offer these services, resellers also require access to skills, as they are often SMEs themselves and face the challenge of a lack of resources and skills.
In order to address this dilemma, some distributors have a services division that is made available transparently to resellers. The distributor already has all of the skills required to implement, support and maintain solutions in-house, and by enabling resellers to make use of these experts, resellers are able to greatly extend their capability. Effectively, resellers will purchase services from the distributor, who will then provide these services to the reseller’s customers, while acting on behalf of the reseller. The reseller can then bill the customer at a marked up rate, enabling them to generate annuity revenue from this value-added customer service.
For the distributor, this model has a number of advantages as well. Not only does it assist with building strong reseller relationships, it also ensures that end user customers of the resellers receive top class support and services. This helps to improve the brand image of the distributor’s brand, and improve customer loyalty to the reseller, ultimately pushing sales throughout the channel.
By making use of services from their distributor, resellers are able to offer installation, rollout, design, problem solving and maintenance services. They can thus extend their offering from a ‘box drop’ service to a value-added solutions provider, adding significant customer value. Relying on the distributor’s technical resources, skills and expertise can position these resellers to tackle the volume business and deliver services that provide annuity revenue. Resellers can become a ‘one stop shop’ for all things technology related, offering improved customer service and experiences.