Capitalizing On Competencies

One such service is the agent model--not new, but gaining a stronger foothold among solution providers. In this model, sales pass straight through distributors, which, of course, take all the financial risks away from solution providers and provide them, instead, with a commission for closing the deal.

At first, the agent model was pooh-poohed almost unanimously by cautious solution providers. Why would they let distributors cozy up to their customers? But as the market tightened, solution providers looked for ways to trim costs--and they've changed their tune with the agent model, according to the distributors that offer agent relationships.

For resellers in today's economy, "the ability to convert fixed costs into variable costs is the most important thing," says Carol Miltner, CEO of the Global Technology Distribution Council, Santa Ana, Calif. That's why other money-saving, distributor-led services are also garnering attention, such as ASP aggregation.

Still, some resellers prefer more traditional relationships with their distributor partners--bad economy or not. They just want solid, back-end support from a distributor while cutting deals on the front end.

Either way, one thing is definite: The worsening economy is sending tremors through the distributor-reseller relationship and forcing each to reevaluate partnerships and core competencies to get the most bang for their respective buck.

Read more on capitalizing your competencies in the 2001 VARBusiness 500, coming out on June 25.