Guest Column | November 13, 2012

Finding Profits In Challenging Times

By Dan Ayala, EVP-Americas & GM-Latin America, CyberPower Systems (USA), Inc.

VARs continue to face a challenging economic climate heading into 2013. Margins have been under continued budget pressure and scrutiny during the past few years, plus growing challenges from online product sales threaten established revenue opportunities.

A key component of a successful VAR strategy includes selecting manufacturing partners that can help your business achieve greater success. A strong partnership can help your business stand out from the rest of the pack. When cultivated, the partnership can provide you with higher margins, increased revenue opportunities, and carve differentiation in the marketplace.

5 Keys to Improve Your Profits with a Trustworthy Manufacturing Partner

  1. Technology. Your manufacturing partner should have a strong technological background and track record with products ranging from entry level to high-end solutions. The manufacturer’s product line or solution offerings should demonstrate a strong understanding of the market space challenges and the solutions they produce for customers like yours.
  2. Quality. Your manufacturing partner should have an outstanding track record of quality in the IT channel. Today, it’s easier than ever to verify the quality of a manufacturer. A few ways to get started include: reviewing their product offerings online, inquiring about their products to other VARs, reviewing chat board discussions, reading product reviews and studying customer testimonials to get an informed assessment of the manufacturer’s quality. After you’ve determined a couple candidates, contact the manufacturer to request product demos. It’s important to review the products to ensure they will fit your customer’s needs.
  3. Innovation. Talk with your potential partner to learn more about the latest products they have introduced to the market over the past couple of years. Has the manufacturer received recognition for their product or engineering innovation? How many patents have they been awarded? Are they a true manufacturer? Answers to these questions will help you understand the manufacturer’s innovation frequency, commitment to new ideas and most importantly, capabilities. Alignment is vital for a long term, successful partnership.
  4. Technical and Sales Support. It is critical that your selected partner (manufacturer) stands 100% behind your efforts to ensure success at multiple stages of your customer’s lifecycle. Ask your manufacturer how they will support and facilitate your sales. They should be an extension of your sales team and should be eager to help you provide solutions that go beyond customer expectations. Don’t settle for less.
  5. Bottom Line… Profits. To achieve maximum sales profit, select a manufacturer that has a strong partner program. A competitive partner program will offer exclusive VAR margins, technical training, resource tools, sales support, product rebates, seasonal promotions and more, to help you achieve greater margins. Be sure to compare available programs to determine what your partner can do to help you achieve greater success. Historically, new and successful manufacturers are technology innovators who tend to offer greater margins to the VAR community.

How to Profit with Your Partner

Close the Sale. Your manufacturing partner should be available to assist you and your team in closing business with your customers. Customers are unique and many will require deeper involvement from a product expert. A trusted partner can help reduce closing time, by providing detailed answers and alleviating customer concerns about the products used in an overall solution.

Solution Co-development. Unique customer needs may require unique solutions. An agile and flexible manufacturing partner may offer configurable or custom product solutions to help you win business. Flexible solutions may include deployment options, product adaptations and configurations. These unique solutions can promote you as highly valued solution provider.

Pricing Structure: Your partner should have a price structure in place to help you achieve maximum profitability. As a VAR, you shouldn’t have to worry about channel pricing conflicts. A healthy margin should always be transparent. Review your acquisition price, program margin and additional rebates/promotions, and then compare with online resellers.

2013 can be your best year ever — Align your business with key manufacturing partners.