Demise of a Reseller

July, 2008

The theme of last month’s issue of Parking Today concerned dealer/distributors or
value-added resellers. Many believe that you get the best price by going direct to the manufacturer.
I’d like to give you some food for thought. First of all, why does the direct-from-manufacturer business thrive in any industry? Most of you would say there are two reasons: low price and single source of accountability.
Finding the lowest price isn’t anything new. The thousands that stream in and out of my local Wal-Mart, Sam’s Club and Costco stores can attest to that. And single source of accountability? Dealing with the manufacturer only vs. manufacturer and dealer/distributor seems easier.
But let’s say you buy an electric blanket from Sam’s. You get it home, place it on your bed, and the darn thing doesn’t work. No problem, you say; it comes with a manufacturer’s warranty.
When you do get back to Sam’s 10 days later, you are informed that it no longer carries that make and model and you have to call the manufacturer directly. So, you go online to the website listed in the warranty information, and the only thing you can find that may help you is going to the “Contact Us” button.
You wait three days and receive no e-mail or return phone call from the manufacturer. So you call the toll-free number listed in the warranty information, and get the Famous Automated Attendant.
You know the next words: “Thank you for calling Hard-to-Reach Manufacturer. If you know your party’s three-digit extension, please enter it now. For a complete list of staff members, please spell the last name …”
I’m sure you know the rest of the drill. So, you press “zero” to get a real person on the phone. However, you are greeted by: “Sorry, the operator is not available at this time.”
So, being ignored by your online service request and not being able to get through via the toll-free number, you use 30 minutes of your precious weekend time and write a letter and send it via snail mail to the manufacturer. Two weeks later, you receive a “form letter” acknowledging your request and asking you to complete an accompanying “Service Request” to ship back along with your blanket to the manufacturer (at your own shipping expense, of course).
The response: “Please allow 8-12 weeks for the resolution of this matter.” Well, 12 weeks is three months, and you won’t need the electric blanket then because it will be summer!
Now, if you had purchased this same electric blanket at a full-service store, do you think you would have had that much trouble and inconvenience?
We resellers have bemoaned the Internet (direct-from-manufacturer) selling crowd for several years now, and it’s not going to fix itself. You have to decide if you truly want to be a value-added reseller or just a commodities broker.
Several steps are necessary to save the value-added reseller from becoming extinct.
Start with the manufacturers of the parking products.
Dear manufacturer:
If you want to sell to the end-users at dirt-cheap prices – sometimes going below what you charge resellers – then you’d better stoke up a separate inside sales department and a support department to handle trouble-shooting, over-the-phone or online installation, version upgrades, patches, fixes, and training.
That’s what we resellers do right now! And since our employees work for pay, we have to charge for those services, as you will discover as well, since I’ll bet you can’t find any folks who’ll work for free, either.
Oh, you say, we don’t want to cut out our value-added resellers. We just want to move more products, so we’ll have you sell direct to end-users.
Sooner or later, your end-user customers will get frustrated and decide your brand is not worth the trouble. Just ask any reseller. We have bailed many a frustrated end-user out of a situation that he or she got in over his or her head with a “self-install.” Now what will that do to your reputation?
Do you not realize that maintenance agreements are huge profit areas if you do your job right? Do you not want repeat business in the form of add-ons, supplies and version upgrades? How are you going to know when any customer needs any of these things? Can you trust the customer to know which product best matches his or her work environment without doing a thorough needs analysis with that company?
And finally, for the end-user: You get what you pay for – simple as that. If you want to shop on price alone, then direct-from-manufacturer is heaven for you.
But there is a mean catch to that: If you run into any issues, remember that the product or system you got such a good deal on affects your entire parking operation. Do you really want to deal with all your customer’s parking patrons when they raise the gates and lose hundreds or even thousands of dollars of revenue?
I hope you decide to take more pride in yourself as a reseller and put the “value” back into it. If not, we resellers are a vanishing breed.

This was adapted from an article originally published in Marking Time magazine. Sherry Evens is President of Evens Time in Indianapolis, IN. She can be reached at sevens@evenstime.com.


Sidebar:

“It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything, because the thing you bought is incapable of doing [what] it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it cannot be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that, you will have enough to pay for something better.”
– John Ruskin, economist and author