UPS SELLING

Large volumes cannot be expected from metros...

UPS vendors are not justified in expecting large volume of business from
metros like Mumbai. Power conditions in class-A cities are generally very good
and so at least in the entry-level segment, demand for UPS is not very high.

Moreover, vendors by and large have promoted these UPSs as back-up power
devices rather than power conditioning and data-laoss prevention devices.
Vendors need to spread a lot of awareness among channels and end-users on the
usefulness of a UPS. They need to underline the criticality of data and high
network uptime and demonstrate as to how a right UPS solution will help ensure
that one’s business is up and running all the time.

Vendors also need to technically brief users on issues like actual wattage
and required wattage of power supply.

Adopt geography-relevant strategies...

Vendors should not have a single marketing strategy for all the geographies
as different geographies have different power requirements and different user
base. It is important for the vendor to promote UPS as a power conditioning
device outlining its usage not just for PCs but for other electronic devices as
well.

Additionally, mindless expansion of channel equally across the country is
something which is affecting our business. Vendors need to understand that by
merely adding more partners, volumes are not going to happen automatically. UPS
still is more of a ‘push’ than ‘pull’ kind of product.

Prevent distributors from dumping...

Though not being a problem unique to UPS only, distributors do dump products
on partners. Also, presently UPS is not a great business proposition as margins
have shrunk to two to three percent. The pressure from distributors in the form
of dumping, when there isn’t a very high demand in the market, takes a toll on
partners’ business.

Regional players score over national players...

It is a fact that despite the number of national and MNC players making
their presence in the UPS segment, regional players score any day over them in
terms of pricing, warranty and support. Contrary to the popular belief, there
are quite a few regional players whose UPS are of as good quality as compared to
MNC brands, if not better. They also have a huge price advantage and hence our
margins are far more secure.

I have come across instances where these companies provide support even after
the warranty period is over and show personal interest in making sure that the
clients get satisfactory service.

UPS means more than back-up power...

As against the common belief, the function of a UPS encompasses power
conditioning as well as power back-up requirements. Besides power failure,
problems like power sag/surge, line noise, frequency variation and harmonic
distortion also exist. Though the power situation and quality of power is good
in some parts of Mumbai, the suburban areas and power situation in other metros
leave a lot to be desired. Thus there is a strong need for power conditioning
and power back-up devices.

Our approach to power protection revolves around the nine most common power
problems present in any office requirement and we take proactive steps in
educating the users about the right usage.

Eliminating inter-channel competition...

Expanding a channel geographically does result in increase in volume sales.
However, what poses a problem while expanding is that the channel competes
against each other. This is detrimental to the profitability of the resellers
and the company. This is why we have always worked on a maximum of two
distributors in each geographic territory and also ensured that the reseller
base is spread across the geography of the city to avoid inter-channel
competition.

We exert a tight credit control...

There are distributors in the UPS business who dump stock on resellers with
attractive incentive schemes. They also tend to dump by giving extended payment
terms. However, we have adopted a strategy to run incentive schemes that rewards
resellers not on the basis of their product stocking ability instead on their
ability to push the product to end-customers. We also exert a tight credit
control on our distributors ensuring that the latter cannot offer extended
credit term to partners. We have maintained our business model in such a way
that a distributor gets at least nine percent margin on the entry-level product.

International standards are lacking...

UPS supplied in the market by regional players do not take care of
power-conditioning requirements. They do offer a better pricing for the product,
however the products are not as per international standards and do not
incorporate features offered by national players.

Usually regional players are able to offer a better price through cutting
down on specifications and features from their products and the customer needs
to understand this before deciding on an inexpensive product offered by regional
players. Also, national players with large volumes should be able to offer
products at better prices to customers.

As far as service is concerned, it is the most valued priority after product
quality. We have created benchmarks in service excellence, internationally and
are aiming at replicating the same here.