Posts: 83 From: London & Southern England Since: Feb 2002
posted 25 November 2002 05:10 AM
Hi all,
heres a topic to start a flame war of epic proportions!
Are "Multi-Brand" resellers a barrier? Or at least making life difficult?
My thought is this, here in the UK at least a vast majority of resellers sell multiple brands of kit. Good in part that they can offer to a prospect the unit they want.
But is it bad for our industry? All of us here in the UK know how hard it is to win business. Hell pretty much all the resellers are pushing the same kit at the same people, price and service become the big issues. The competition is forcing the margins and the small margins can only kill the service, and finally poor service kills the industry. (Users get sick of bad service)
So, would it be better for all, if the universe reversed and resellers were one manufacturer loyal? Reseller A = Polycom Reseller B = Tandberg .... and so on.
posted 25 November 2002 10:38 AM
It is an intersting question.
What are cutomers saying on this?
From customer perspective, multi-brand may be good in a way because customers can consider and choose different products "at one stop shopping basis". It is kind of bothersome to go to one reseller to another to find the best products,prices and services. But the downside is that customers may not be able to get the best price as they are in a way trapped by a single reseller.
From reseller perspective,it may depend on internal condition or status quo of each reseller. Big resellers with sufficient business capital and experience in this arena, and with plenty of high skilled sales people and technical engineers can take multi-brand approach to their business, however,smaller resellers may not be able to take the same kind of approach because of lack of human resources, business capital etc..
It may be not good for resellers in this industry to take multi-brand as pointed out by Mr. Wicks but if customers are preffering that, the resellers must come up with ways to help generate revenue for themselves, not just lowering prices to compete. It surely kills everyone playing in the market.
They have to come up with ways to differenciate their services to others when price competition is hard thing to continue. It is a tough question again,however.
keisuke Hashimoto 0:25am Nov.26,2002 Japan Standard Time +9GMT
This message has been edited by Keisuke Hashimoto on 25 November 2002
Posts: 83 From: London & Southern England Since: Feb 2002
posted 25 November 2002 12:03 PM
Hashimoto-San,
Good points, I tend to agree that potentially the multi-brand "one stop shop" approach is appealling to the customer.
But as you mentioned, I am dubious as to the technical strength of resellers to thoroughly know all the brands well enough.
The solution used often is to go to the manufacturer for expertise/demo's. WHich is good but highlights perhaps a lack of knowledge on behalf of the resellers sales staff?
Questmark is a vendor independent reseller. We have invested heavily in infrastructure and expertise to be able to give our clients the choice of products, support and services they need for thier specific business. We have no particular brand of tin to sell.
My view of the industry and the risks to all in it, is that poor quality in the supply and support of systems will result in bad deployments and limited if any return on investment for the buyer. To overcome this the industry needs to grow the quality in the channels from manufacturers, through distribution, and resellers to give educated buyers a no risk, quality assured implementation. In the UK you can probably buy videoconferencing systems from about 400 to 500 companies. The top tier of these, i.e. the 20 to 25 who are dedicated videoconferencing vendors with infrastructure and expertise to be able to "do a quality job" are continually having to compete with the others who sell boxes on a "ship and forget the consequneces" basis at ridiculous prices, typically cost plus 3%. The result of this is poor implementation, bad experience, and a shortfall on the expected return on investment. This stops the whole industry growing as these companies will hardly deploy more and they network with other companies to let them know that it didn't deliver what they expected.
The industry has to educate the buyer to demand quality. Accreditation by manufacturers is a must. An industry wide accreditation would be better. An industry recognised mark or brand to put on business cards, letter heads, web sites etc., that shows that an organisation is video enabled and prepared to use it for supplier and customer contact would take the market forward.
Finally, it is possible to be vendor independent, but it costs. However, it is imperative that we promote the good practice and successes of the 20 to 30 in the UK who have made these committments to the industry to grow the industry in a quality way.
By the way, contact me to rearrange the meeting we had planned earlier this year.
posted 09 December 2002 12:07 PM
As manufacturers expand their distribution in a competitive marketplace, it is natural for the quality of the channel to diminish. In fact, it can't be helped. I agree that the manufacturer has to hold up the banner of training, quality, and substantially support the channel. Maybe Tandberg has come to this realization.
I began our AV division two and a half years ago and have had the opportunity to do about a half dozen VC rooms, as well as bid unsuccessfully on a dozen more (most of them Polycom). We were able to get product with little or no effort. Not that we are an inexperienced contractor by any means, just new. But we are not specialists in this area.
I also agree that establishing direct distribution is costly but if manufacturers want the quality and the margins, distibution needs to shrink. A few companies have done this with some success (BARCO culled about 40% of its dealer network once), others have failed because the product it self was becomming more common place with lots of substitutes.
I believe the industry is becomming more commonplace and that it will inevitably be plagued with more, less-expensive alternatives that are easier to empliment. This will present significant challenges to the VC companies that are not leading this technology change.
As a design/build AV group, we are trying to see through this fog in order to pick a direction for ourselves. Who's the right player to align with? Where are the new players? Do they have a technology that will sustain us in developing solutions with margin? Are they contacting us looking for partners? What are their training and service supports? On, and on.
The elephant always looks different from different sides. But this is a real issue for the industry.
quote:Hell pretty much all the resellers are pushing the same kit at the same people, price and service become the big issues. The competition is forcing the margins and the small margins can only kill the service, and finally poor service kills the industry. (Users get sick of bad service)
This is a problem almost everywhere in ITC field. I try to describe the way I see the world.
When a customer purchases videoconferencing solution, he actually buys 4 services: 1. Advice (including usage of the demo room) from a consultant 2. Production from the producer 3. Delivery from the distributor 4. Installation, training and after-sales service from reseller.
Points 1 and 4 can be offered together as part of system integration.
The resellers have historically offered services no 1, 3 and 4: they have acted as consultants, distributors (partially at least) and service partners. Nowadays, many companies are providing only service no 3 (logistics) and that mixes things up.
In videoconferencing field, many big companies are purchasing the equipment centrally and that reduces the profitability of local resellers as well.
(1) The situation from customers' point of view.
Customers are different. Some understand what they are buying and agree to buy everything from one partner and expect good customer care.
Some don't know very much about what they are buying and therefore are able to compare only price numbers.
What should the resellers do?
1. To explain clearly the value they are offering comparing with other companies.
2. NOT to deal with IT-department if possible.
(2) The situation from resellers' point of view.
Many ITC resellers have had exclusive distribution rights for some brands (this practice is still common outside ITC field), now it is hard to them to admit that the right to represent a brand is not a competitive advantage any more. Resellers have to understand what is the real value they are offering. And what should it cost to a customer.
To cope, the resellers have to develop new services, like:
System integration. For instance videoconferencing + presentation technology + collaboration + data communication + web conferencing + streaming, etc
Videoconferencing rental services
Financing
Service contracts with replacement device
I think it is up to VAR/SI how many brands he represents. If the number is too small, he may lose customers because brand preferences. If the number is too big, the customer may doubt about the competence.
Every kind of comments are welcome,
Marko
This message has been edited by Marko Laurits on 15 December 2002
Posts: 10 From: Copenhagen, Denmark Since: Jan 2003
posted 09 January 2003 06:57 AM
Video & Visual business is new to me. I came from telecom, reselling and partly development. But I love the potential in visual communication. There are two issues - as I see it:
1) KNOWLEDGE 2) TRUST
I target to be a "ONE STOP SUPPLIER". The reason is that I spend time in clients, sourcing, contacting and I do not want to loose my time and money spend - just due to the fact that the client drop out due to my design is "not right". Polycom, Tandberg hold in my view deep down the same components. Features they are different. So the question is EDUCATION at the reseller. If he can ask questions - and come to knowing the clients needs, then he just have to supply it. I have never had any problem asking a PTT/Telco client to direct one of my HQ´s technical guys for a specific question. It is not about having all the answers, but being able to provide the answers. In cars we see it happen, more and more dealers have a selection of brands. The same will happen in VC business - and I do not mind. I will never inform clients more than what I know. A writer mention the vendor like Polycom or Tandberg. But are they over time loyal to each and every reseller. I am sure not. They have a pricelist that is as different as the resllers are. And where is then the loyality. The vendors are loyal to BUSINESS. If they at the same time like and feel comfortable with X resller, they tend to build strong relations. My own first job was moving a large potential client away from Sony. They ended up buying Polycom - but I am sure more due to the relations that we was able to create to the client - than due to price or bits and bytes!
A good salesguy can sell sand in sahara. If he know who have or where to get answers he can not handle himself, he will always have a long list of clients. I am sure that in some future Polycom own resllers and distributors as it takes place in the car industry. But it will and can never remove the "one stop" business or the 3%on purchase price sellers. But do we have to fear them? Only if we are not much better of ourselves I aim to be as much of a "one stop" resller as possible. The goal is that what the client want - the client gets - but based on a evaluation of the client needs. A last "in your face" statement: If the client want high level design on the hardware, would a Polycom then step down from the business - and point towards a Tandberg resller? I would expect not! Why did Ford buy Jaguar and now also have Rover or at least Land/Range Rover???? Due to the fact that customers are different - also in needs and taste.
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posted 25 November 2002 05:10 AM
