Resellers not adding value

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Too many resellers retain a box-selling mentality that will ruin their customer relationships and business long term, one hardware vendor has claimed.

Toshiba Australia national marketing manager Mark Whittard told a recent press conference on the future of the PC market that, despite massive change in the industry, resellers had largely failed to pay sufficient attention to customer needs.

“Certainly, educating resellers is a challenge. The mentality of resellers is that you sell them a box and then they walk away. We do a lot of work in trying to educate them and tell them at the time of purchase that it is the start of a relationship, you have to look after [customers] and that they should have them for life,” Whittard said.

Resellers who wanted to win return business must pay close attention to customer needs before the box left the shop, he said.

Whittard said more resellers needed to consider offering add-on services such as HTML email updates about software upgrades or patches, or even putting the updates on a CD and sending it out to the customer. “Some resellers actually go to the trouble ... but they are few.”

He believed many resellers needed to think more about post-sales support and a “continual refresh” cycle for each product. Most people bought new notebooks every three years.

“If resellers look after the customer they will get that return business,” Whittard said. “Many in this industry forget about the customer and they all talk about themselves and their products. They seem very nice when they sell you the product and then they just walk away.”

Whittard challenged resellers to look more closely at the market to ascertain customer needs, and develop a tightly-focused strategy to sell to that instead of merely offering a range of whatever was available.

The proof, he hinted, was in the pudding. The market itself was growing, yet in the last two or three months most major distributors' sales had declined “about 20 percent” across all IT sectors, he said.

“Quarter one and two was very good but since July it went off the boil. No one can really put a finger on it but one of the reasons, we believe, is a total saturation of computing devices in the marketplace and confusion from the market's point of view,” Whittard said.

He agreed that vendors, for example, needed to train resellers to update Windows-based PCs with the latest security patches before the devices went out the door with the buyer.

“Look at what our customers are doing, [they] want a portable device,” he said. “Security starts with the laptop itself, being a portable device, and that is a concern for all of us.”

With the structured global network of OEMs, particularly for Windows, harnessing the web for pre-sales patch updates by vendors and resellers alike should not be difficult, he said.

Corporate reseller margins were down to single-digit percentage points. But those selling single units were still making 12 to 15 percent on notebooks at least and, with upfront discounting and business development funds from vendors, could afford to ramp up support, he argued.

“If they are passing that to the street then that is their problem. If they are doing that, then they are just a hardware reseller and they will quickly go out of business,” Whittard said.

Resellers who didn't add value and didn't make the volumes would find vendors increasingly going direct and taking their business, he added.

“The ones that survive will certainly be delivering more than just a piece of hardware,” he said.

Fleur Doidge attended the Face the IT Media Forum in Queensland as a guest of MediaConnect.


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