Finding Distributors for Your Product
Q: We have designed and developed an online appointment scheduling application. Businesses that are appointment-oriented can eliminate the paper calendar and improve their in-house scheduling, reduce costs and increase customer satisfaction by allowing customers to schedule appointments over the Internet. They can also increase appointments and revenues with easy-to-use CRM features. Our business model is to distribute through Value Added Resellers (VARs). How do I find VARs and/or channel distributors that have an existing sales force and existing customer base to market my product?
A: Your question is one that I see frequently. Basically, you're ready to go to market with your product and you want to shorten that time as much as possible. You have picked a product and an industry that is populated very heavily with products, services and solutions, which is both good and bad.
On the plus side, any industry that has heavy competition has heavy consumer demand. That's good because there is always room for another provider. Here are some of the most important determining factors if a VAR will pick up your product and rep it. You best be prepared to answer the following 10 questions before you develop your short list of potential VARs (more on that in a moment):
- Does it fill a niche or a need that is not currently addressed?
- What is the product's unique selling proposition?
- What types of marketing support are provided?
- What type of product training is necessary to sell and install it?
- What are the product's margins? That is, how much will the VAR make on each sale?
- What other incentives will the VAR get for selling the product?
- What are the long-term plans for the product's improvements?
- How was the product designed? Has the product been tested? And who tested it?
- What support will be available from you, the manufacturer?
- Can the VAR give away the first one or two sales and still make their commission on it?
But there are some downsides, too. It sounds like you already have the product developed. Based upon your answers to the following questions, this could be bad. Here's why:
- Before you developed the product, did you go to the users of similar products, services and solutions and find out exactly what they needed that they were not already getting?
- Before you developed the product, did you go to the channel that you want to sell the product and ask them, "If you could have a product to sell in this space.
- "What features would it have?"
- "What price point would it have?"
- "What pre-sales support documentation, marketing and post-sales support would you need?"
- "What would the provider of such a product have to do to gain and maintain your top-of-mind and business loyalty?"
The fastest way to shorten time-to-market for any new product is to have the marketplace help you develop it. The fastest way to shorten time-to-revenues is to have your sales channel help you develop the entire pre- and post-sales program. Where there is ownership, there is loyalty--and loyalty builds top-of-mind, which turns into wallet-share!
Finding the Right VAR
Here's a three-step plan to finding a VAR to rep your products, services and solutions:
- Go to the Web sites of the top five suppliers of competitive products, services and solutions and find out: who the local VAR is in your city, who the VAR is in the furthest location from your city, and how to learn more about their VAR program. (Most of this information can be downloaded.)
- Compile a complete package of your product's unique selling proposition, marketing plan and product support plan.
- Contact the VARs you've found and ask the following questions: Are you in need of a new product to represent? What margins would you have to make on a product for it to earn your top-of-mind? What's the best way for you to evaluate my products?
There are a number of associations that can be of assistance; find them by going to your local business library and spending time with the Directory of Associations. You can also tune into CRM Talk Radio, which is broadcast online at www.wsradio.com (click on "CRM") every Friday from 8 to 9 a.m. PST.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.