Distributors As Concept-Sellers

Market demanding value...

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.

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.

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...

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.

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.