Riding the wave of integrity in the channel

I imagine that a significant proportion of the IT Reseller community-certainly those involved in AIDC solutions delivery-remember the nineties with some fondness. Younger readers might find it hard to believe that only 10 years ago a VAR could charge 750 for a single laser bar code scanner, returning a gross margin of 40 per cent. And thats before the customer ordered integration consultancy services to enable him to use it.

Ah, halcyon days indeed (of which I have only the haziest recollection, being of tender years). Sadly its unlikely that margins go in any direction but south. Nevertheless, it strikes me that in other ways we are now facing similar conditions, and I believe that 2005 is going to be a year in which the integrity of the channel will be just as important and effective as it was in 1995. "Is a little knowledge a dangerous thing? You bet!"

Back in those days, when Paradigm was a stripling of four years and RFID was still regarded as witchcraft (still is in many quarters, I have to acknowledge), end-users were beating a path to the door of any reseller who could actually make hand-held computers and peripheral devices perform their required tasks. Added value was a necessity, and manufacturers would have happily embraced any solution provider who made dreams a reality.

Of course solution providers have always come in many flavours, from wealthy multinational corporations to a chap sitting in his garden with a laptop in front of him, a head full of expertise, but not much more in the way of liquid assets than his cup of PG. Because the latter (the solution provider, not the cuppa) can cause palpitations in the heart of the most robust manufacturer, the two-tier distribution channel flourished: the vendor supplied cuttingedge hardware; the distributor enabled its availability to the VARs; and the VARs delivered working solutions.

"In mobile data, applications are again becoming more complex, and IT managers require the expertise of the channel to deliver  working solutions."

However, as canny end-users and manufacturers became more familiar with what was going on under the bonnet of these solutions, the lines of demarcation within the channel began to meander and blur. Is a little knowledge a dangerous thing? Youbet! As more products came tobe regarded as commodities our commercial waters were muddied,with manufacturers, distributors, resellers and and-users all trampling over one another trying to cut better deals. Inevitably, the results of such shenanigans were not always happy.

Tales of woe
Now I'm not one to start any unilateral brickbat flinging, but I wouldn't be doing my job properly as your trusted correspondent by not passing on the headlines of a few tales of woe (none, probably, involving my company or its suppliers and customers, ahem) Like the vendor who bypassed the distributor and reseller to (wrongly) second-guess an end-user's requirements and then found its offices full of several hundred unwanted and uniquely under-equipped mobile computers-theyre probably still tripping up over them. Or the reseller who spurned the expert advice of its distributor to go wireless, insisting on a cheaper (and less rugged) cable connection between the hand-held terminal and mobile printer-the result was considerable expense and embarrassment for the reseller. There was also the case of the vendor who overzealously delivered a large order to an end-user a full quarter ahead of the customer's requirement, and then tried to persuade the distributor and reseller to finance the deal for three months (it failed). And theres a general rule of distributors that resellers would do well to bear in mind: we didnt sell you that product, ipso facto we aint supporting it!

"Money is often the root of disagreements, so it pays dividends to thrash out the financial details and agree credit and settlement terms in advance."

Just as technology marches on, so endusers continue to examine new ways to exploit it in the interests of the bottom line. In mobile data, applications are again becoming more complex, and IT managers require the expertise of the channel to deliver working solutions.

Paying dividends
At Paradigm we are increasingly involved in teamwork, where manufacturer, distributor, reseller and end-user sit down together to plan the project. Obviously, this requires trust on the part of all the players, but the reward is a smooth implementation. Typically, the user may ask for a function for which there is no immediately obvious answer. However, workarounds, as well as potential problems, are more likely to be identified when more experts are looking at it from differing angles. It also helps to have the functional  pecification clear to all parties, as well as the budget. Money is often the root of disagreements, so it pays dividends to thrash out the financial details and agree credit and settlement terms in advance. point of sale fulfil them successfully.

"Lets make 2005 the year of channel integrity."

I believe that many resellers would be quite surprised to discover just how supportive their distributor and hardware vendors can be when it comes to winning business, then, much more importantly, delivering solutions profitably. And vendors who wish to succeed, without suffering red faces, should trust the channel to bring home the bacon-we have the expertise and we're more than willing to apply it. Lets make 2005 the year of channel integrity.


Ralph Donohue is managing director of Paradigm Distribution. Paradigm Distribution offers trade customers the world's best available products for auto ID and data capture applications. More than simply delivering the best products at prices designed to maximise profits for channel partners, the company has earned a reputation for providing unparalleled pre- and post sales support, including access to technical experts to ensure that partners' businesses win orders and fulfil them successfully.

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