A Retail Solution For Building Small VARs

Retail doesn't own these customers exclusively. Many of these small businesses will buy over-the-counter because the retail floor gives them an opportunity to test-drive products. By the way, they get to look at those fancy giant flat-screen plasma TVs and pick up a new Xbox 360 game for their kids, too.

Through VARBusiness' State of the Market research, we know that solution providers tend to sell to like-sized businesses. Small goes with small and large goes with large. Small solution providers are also challenged in developing their markets and leads, expanding their sales and administering their business.

While some may find mixing retail and B2B channels a little unsavory, the recent partnership between Microsoft and CompUSA does makes sense for thousands of small solution providers.

Under the deal, Microsoft will help CompUSA connect with its small-business specialists to deliver support and service to the retailer's small-business customers.

"It extends expertise and technology knowledge that you won't find in a store," says Carrin Falconer, CompUSA's vice president of sales and services. "Through this, we know that we'll meet and exceed the needs of our small-business owners."

CompUSA will own the relationship, and will handle all billing and administrative work. Referrals to solution providers will be jobs that are pretty much "show up and get paid."

"They see what we're doing and bring more of their customers in; it's the circle of life," says Gregory Geodakyan, managing partner of SoftNet Technology in Atlanta. "I try to sell on their behalf because they're a good partner and I'm a good partner in return."

Such arrangements are nothing new. CompUSA and other retailers have been contracting support work to local solution providers for years. With the advent of services such as Best Buy's Geek Squad and Circuit City's FireDog, many solution providers have seen retailers as competitors for the small-business market.

Consider this: Many of these small businesses buying IT through retail won't remain small businesses forever. Many will graduate to become midsize businesses, and their IT needs and purchasing habits will change. Who do you think their loyalty will be with? The retailer they know through an 800-number or the guy they see in their shops installing routers and upgrading PCs?

Likewise, such arrangements are godsends for small solution providers struggling to find leads and close deals. Geodakyan has been doing business with CompUSA for six years, and the partnership has helped him grow business. And, he notes, nothing in the deal precludes him from developing business independently.

At the very least, such retail/B2B channel partnerships can give small solution providers enough of a recurring revenue stream that it could underwrite their larger business goals and market development initiatives.

"CompUSA recognizes the partnership of what we provide and it's an ecosystem," he says. "As long as everyone recognizes the value, I don't see a problem with it."

Microsoft says it plans to extend similar programs to other resellers. That's probably a good thing, considering CompUSA is shuttering 125 stores.

How do you plan to grow your business? What partnerships are going to feed your success? I welcome your stories at [email protected].