When are manufacturers going to realize how they kill their own channel and upset their partners?
JDMI, like other resellers around the country, get visits from all sorts of potential partners. We go to conferences like XChange to hear about new technology and new programs to help us sell their products. We hear about profitable solutions for our customers to consider. But many of these manufacturers still wake up and think its 1987 and not 2007.
Here is the breaking news to all manufacturers -- it's 2007!
 |
JOHN MARKS |
My issue is that these "manufacturer partners" still go to our distributors, give donuts and cookies to our distribution reps and send out e-mail blasts inviting us to take part in their "Floor Days." Floor days are when manufacturers in our industry give deeper discounts on many of their SKUs to resellers like us for one day. That's right -- one day only.
Floor days should have left this business the same day price protection left.
Some resellers wonder why many of the stocking VARS have a price advantage on deals. In many cases, the stocking VAR took advantage of floor days. They bought skids of product to stock and are trying to unload the stock to turn it into cash. Stocking resellers need to turn it into cash before the price goes down and they get stuck with the product because they can't return floor day product and can't claim price protection.
For you newbies, price protection was, in 1988, when manufacturers would announce a price drop and you would receive a check in the mail for the price difference on all the stock in your warehouse.
Trust me, in the younger days of the industry, price protection was a huge profit center for stocking VARS. When price protection went away so did the ability to stock product for the majority of resellers in our industry. Thus, drop shipping through distribution became popular. I don't believe that many resellers wait on deal fulfillment because next Thursday is a floor day and an extra $25 of margin is offered. If you're like me, if a purchase order happens to land on a floor day, congrats to you for good timing and making extra margin.
Make no mistake -- floor days are for manufacturers to make their quarterly quota numbers and for stocking VARS to gain price advantages while the vendor says that everyone had the same opportunity. Same opportunity? I don't think so. I can't wait until the next XChange conference when these same manufacturers tell us we can all make money selling their products. Maybe if they got rid of floor days, we just might be able to get some programs with some consistent margin integrity.
John Marks is CEO of the Chicago, Ill.-based VAR, JDMI. If you would like to share your opinions with the channel as a Channel Voices column, send it via email to lrhooper@cmp.com with Channel Voices as the subject line.
|
Five Companies That Dropped The Ball This Week For the week ending Feb. 10, CRN looks at five companies that were either asleep at the wheel or just didn't make good decisions. |
|
Five Companies That Came To Win This Week For the week ending Feb. 10, CRN looks at five companies that brought their 'A' game and made moves to beat out competitors |
|
10 Challenges That HP Wants Partners To Tackle Right Now CRN speaks with HP's business unit chiefs to get a sense of where they'd like partners to focus in the coming year, as well as how CEO Meg Whitman is making a difference. |
 More
Slide Shows |
