This article originally appeared on the Var Insights website.
By: Bill Nulf, VP Channel Sales at MicroTouch
Value-added resellers’ (VARs) success has always depended on a network of manufacturing and vendor partnerships. Prior to 2020, it was typical for VARs to find a component or device they needed, check price, availability, and lead time, and send a purchase order. However, relationships with manufacturing partners have become more complicated, and in some cases, they impact your ability to deliver the solutions your clients demand.
When you plan for 2023, it’s smart to evaluate your vendor partnerships so you can position your business for the greatest success. Ask your partners these questions to increase transparency about your access to the hardware, devices, and other solution components you need.
How deep is the manufacturer in the supply chain for that product?
After a few years of excessive lead times – up to 40 or 50 weeks in some cases – VARs need to ensure they’ll get delivery within project timeframes. Although there are no guarantees, some manufacturers can deliver more than others.
Vendors that manufacture their components or devices rather than using contract manufacturers typically can fill your orders more reliably. They aren’t dependent on a contract manufacturer’s ability to get the parts or raw materials it needs, and the contract manufacturer’s schedule doesn’t limit them.
Additionally, businesses that manufacture their own products can approve a higher price to order parts in short supply and place an order more quickly. However, contract manufacturers can’t make that decision unilaterally. The time they need for price increase approvals may close the window on the ability to order those parts, leading to longer lead times.
Does the manufacturer have good relationships with carriers?
Another question to ask your manufacturing partners is which carriers they use and the quality of their relationships with them. Strong relationships allow operations to run more smoothly and cost-effectively.
Transparency is key to those relationships. Manufacturers can build trust by meeting payment terms and consistently fulfilling agreements for shipments. Sharing data can also help build strong relationships, keeping carriers informed of changes so they can plan and adapt their schedules and maximize revenues.
Of course, a good carrier relationship will also give your manufacturing partner the best chance at timely shipments and deliveries. Moreover, the manufacturer may leverage some of the carriers’ relationships to address challenges.
How widely distributed is the manufacturer?
Do your due diligence to understand your manufacturing partner’s go-to-market strategy. Are you working with a widely distributed company, or does it have limited distribution? Does the manufacturer recommend minimum advertised pricing (MAP)?
Your manufacturing partner’s strategy can make the difference between you vying with other resellers to get the components or devices you need at the best price – and how competitively you can price the solutions you offer. Investigate your partner’s channel policies and their measures to protect your margin.
Does the manufacturer have alliances with other vendors?
You’ll rarely sell a touchscreen or a kiosk without other solution components or software. Understand your partner’s relationships, certifications, and integrations with other vendors. Manufacturers that work with other companies to offer bundles can offer significant value to resellers.
However, it’s smart to look closely at manufacturers that attempt to be all things to all people. A manufacturer focused on excelling in a well-defined area often provides higher-quality products. Moreover, if a company aims to provide all solutions components, it may not be interested in developing relationships with other companies. That can limit your ability to build a solution with the best components that work seamlessly with others.
The Most Important Factor in Selecting a Partnership
The quality of the components and devices a vendor partner provides – and their ability to deliver them – are vital to your business. However, before you choose a manufacturer’s devices or components for your solutions, ensure your partner and its products have a spotless reputation. Using those products will align your business with your partner’s brand in your clients’ eyes.
Form partnerships carefully, ensuring you can provide the solutions your clients demand and protect your brand in your market.