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Distributors As Concept-Sellers

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DQC News Bureau
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Market demanding value...

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Selling value products as a business is surely growing. The market is

demanding value proposition in every product they buy. In coming years, selling

value will play a more important role than selling products. This has to start

with the mindset, which has to change from the conventional box-moving business

to selling concepts. Many distributors have already realized this and have

created value-divisions within their organizations.

A 'pull' approach creates customers...



Distributors like us have adopted a 'pull' approach to sell products,

over the traditional 'push' approach of a box-mover. By selling value

products, you are actually selling a solution that helps customers fulfill or

enhances their needs.

“Distributors

like us have adopted a 'pull' approach to sell products,

rather than the traditional 'push' approach of a box mover” 



Krishna Prasad, CEO, SES Technologies
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The ideal way to market such products would be to position them through

solution providers or consultants who understand a customer's needs and

requirements better. But to sell it to a solution provider, a distributor has to

show value in the product. Every level in the distribution chain can provide

value. Eventually only those who add value will survive.

Basic requirements for concept selling...



Every box-moving reseller should resort to value-added reselling for his

survival or to move up the distribution ladder. Setting up proof-of-concept

centers and engaging certified personnel within the organization are some ways

how a reseller or a distributor can add value to his business.

Moving up the value chain will require a paradigm shift not only in the

partner's thought process, but also in the way business is done. This can be

achieved by providing incentives to the channel by sharing the product roadmap,

costs in market development, planning joint customer visits and developing

marketing collaterals.

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Selling concepts requires patience...



Any reseller entering the value business will have to imbibe patience and

gear himself for effective response management, efficient servicing capabilities

through on-site support, sharing knowledge through continuous training of

personnel and educating customers. The reseller also needs to train his sales

staff on communication and presentation skills to interact with customers. We

believe in the process of continuous training, re-training and knowledge sharing

with our partners, so that they are able to address the market demand better.

Drawbacks to value distribution...



The frills that are associated in terms of services mentioned above are not

easy to duplicate. There is a lot of human interface involved which means the

soft skills and technical capabilities play an important role in providing value

offering. Also relationship management with the customer plays an important

role.

The trend is evident...

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More and more distributors are looking at value-added distribution. Some have

created value divisions within their companies and have done an appreciable job.

But this makes sense for those distys whose vendors are not based in India. A

disty is expected to do that extra bit in such a case. Moreover, this becomes

essential because of fast-paced changing technology. In such cases, the

distributors are the only people on whom systems integrators can depend on for

the know-how, and we pass them to customers.

Distributors' core is volumes...



Distributors are selected by a vendor on the basis of its reach, logistics

and financial capabilities. They are mainly evaluated on the basis of its

turnover. This clearly defines a distributor in the role of a volume player than

a value provider. Any distributor moving away from this core business will have

to do it at the cost of slowing down his business. This is why most distys have

not entered the value providing business.

“Distributors

like us have adopted a 'pull' approach to sell products,

rather than the traditional 'push' approach of a box mover” 



Krishna Prasad, CEO, SES Technologies
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Concept selling is SI's core job...



Selling concepts is not easy. A distributor's outlook towards business is

more of a box pusher, and it will take a long time before they completely move

in to value-added distribution. At the same time, the volume business is equally

important. A change in the mindset is required. As a systems integrator (SI), I

will always help customers. A reseller's mind may not be geared to cater to

the needs of the end-customers. At best they can build a relation with a

solutions provider, rather than try to wear an SI's shoes.

SI better at customer relation management...



The biggest value addition a distributor can offer is in terms of reach,

logistics, Return Material Authorization (RMA) and financial credits. A

solutions provider can cater to the smallest of customers as well as corporate

customers. A distributor can never go down to a small user. Customer relation

management is stronger in SIs like us. 

Who will distribute...



Creating value division by distributors is okay. But, if everyone does this

in the hope of growing up the value chain, then who will do the real volume

distribution. We still need distributors for logistical management. It is true

that appliances and PC products are merging, and this is causing many to think

on the lines of 'value-add'. Undoubtedly it is the need of the market.

But the fact is, doing both volume distribution and value distribution is not

easy. It will be difficult for big distys to go to customers directly. A big

work force is required. The last mile connectivity will still be the reseller.

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