Services Distributors Can Provide Added Value

In an era of diminishing hardware margins, repair/maintenance services remain an important aspect of product distribution, according to six leading distributors. "Resellers want low prices," says Dale Foster, president of Promark Technology, a distributor of document imaging products. "But they also want competent product service."

Business Systems Magazine (BSM) wanted to determine which post-sale services are the most important to resellers. BSM spoke with representatives from the imaging market, like Foster and Dan Frumkin, vice president of marketing for Law Cypress. BSM also spoke with POS/AIDC distributors like Bill Cunningham, vice president, Penstock ECR; Tim Derrickson, senior director, AccuScan; Bill McCubbins, president, POSdata; and Dave Carrington, president, FoxFire, Inc.

What Are You Doing To Add Value?
Those distributors' representatives discussed why the following post-sale services are important:

• Repair service - According to Foster, Promark Technology has had to lower its prices to better compete with distributors that sell high product volumes at low margins. He contends Promark has been able to recoup margins lost on hardware by offering repair/maintenance services.
  
  Often, system problems don't require "actual" repairs, Carrington adds. "Many problems result from misunderstandings about how the product is used, or how it is to be connected to other systems," Carrington says.
  
  Adds Cunningham, "Traditionally, distributors have outsourced repairs to third parties. But distributors may have to rely on service as a source of revenue if the price wars (on hardware) continue."
• Integration services - Most hardware has become "plug and play" - in that a product merely needs to be taken out of the box and plugged in. However, the ability to tie hardware and software together is still important. Adds Foster, "Many resellers' sales reps can't always answer integration-related questions due to the vastness of the product lines they offer. Resellers should be able to rely on distributors for technical integration answers about their imaging products. If one of my resellers can't get a product to work for the end user, that product is going to come back to me, the distributor. So integration expertise ultimately helps ensure that we get paid."
  
  McCubbins says that product knowledge allows a distributor to be a "one-stop shop" for resellers. "For example, resellers don't always know which type of bar-code scanner is ideal for an application," he explains.
  
  Derrickson says distributors should have a systems consultant to provide resellers answers to their users' questions. He says a systems consultant is also important because users need to know whether their equipment can be upgraded as their applications expand.
  
  Cunningham concludes, "Distributors should be able to do more than just diagnose a problem. They should be able to walk the reseller through the solution."
   
• Warranty administration - Most resellers "don't have the time or the inclination" to track warranties on customers' products, according to Frumkin. He says distributors should maintain records of warranties so that discrepancies can be resolved quickly and easily.
   
• 24-hour help desk support - Say a reseller is preparing a system late at night for a demo with a prospect the next day. If the reseller can't get the system ready, it could lose the sale. "That's why it's important for resellers to have someone to talk them through problems at any time," Frumkin adds.