By Natan Verkhovsky, M.Ht., IT solutions consultant
Welcome to the reality of the times. Hardware margins, what little is left of them, are slowly eroding to the point of being almost pointless. The big boys, like Dell, routinely give it away at cost or below, literally. That’s sometimes the difference of how the big deals get won.
So, if you simply resell hardware, you will go the way of the Dodo bird. Those with better partner relationships (read: deeper discount levels and vast teams of implementers) and deeper pockets will beat the smaller VARs and MSPs on most deals worth fighting for — UNLESS you follow the 3 steps below.
Offer As Much Of The Full Solution As You Can
Understand that solutions providers comprehensively handle the project needs of their clients from conception to installation, including support. This process normally involves studying each client's current infrastructure, evaluating the client's needs, specifying the mix of manufacturers' hardware and software required to meet project goals, and installing the hardware and software at the client's site(s).In many cases, the "solution" also includes ongoing service and support from the VAR/MSP.You don’t need expertise in every solution set you offer — just offer as much support for the client as you can — from project inceptionto completion.Taking them by the hand and walking them through what may be their first time can be a very detailed, involved process. Even if you don’t have expertise in specific areas, you can still offer to be there every step of the way. This may be enough to make you stand out from the crowd that’s just trying to sell your client some products.
Get The Relationships You Need To Leverage Deeper Discounts
When an IT organization turns to one of its solution providers, it’s really buying expertise. If all you want is cheap technology, there are plenty of places to go (like eBay), so it's all about being good at what you do. One way of thinking of the move from reseller to solutions provider is simply more efficient delivery of these skills and expertise.
If you reach out to the manufacturers and publishers — you can simply call most of the tier-1 companies directly and tell them what area you cater to and what services you offer your clients. They have divisions in place that cater just to VARs and MSPs. They will help you get better discounts for your client and potentially help you stand out from the rest — at least offering better prices and some service to go with it.
Build Client Relationships From The Ground Up
There are many clients that are ‘married’ to their main reseller. They get tickets to sporting events, dinners out with their spouses, and countless little trinkets to remind them who their ‘favorite’ sales rep is.
That may be tough to beat, until you start to really break down what that relationship was built on in the first place. If it was created out of a few low-priced purchases and a lot of ‘gifts’, then you can take a competitor’s lunch quite easily — just let the client see what’s really been given to them over the years. If it was great service and great prices — then the climb may be a bit steeper. If you let them see that it’s not a relationship built on them coming to know you and to see you as a trusted advisor in all IT matters, then the scales may tip to your favor.
All in all, the more contact you have with your client and the more points of contact you have within the account, the better your chances will be to move yourself from just another reseller they need to get a quote from and making them look good to their boss — to really being someone they can trust in a pinch. What you recommend, above and beyond someone who just gives them a better price on some hardware, and how you tie it all together, is what will turn you into a solutions provider. Remember to use what got you in front of your client in the first place. Be that go-to-person they can count on for more than a good price on a laptop. The extra service you bring will be your value-add and will possibly be enough to differentiate you from the rest. This will provide you more stability, recurring and expandable revenue streams, and considerably higher profit margins. It pays to be a solutions provider and not just a reseller.