October 16, 2015 at 08:18Grow your garden
The Russian IT distribution market has stopped growing, the number of partners is shrinking, margins are falling. The usual mechanisms for attracting partners are no longer a competitive advantage. We need new ways of development, for example, to grow our partnership community. There are already pioneers.
Recently, I often hear complaints that many companies are closing down and there are fewer and fewer partners, and there are only a few reliable ones. After reviewing reviews of the life of distribution companies and talking with acquaintances of top managers from IT companies, I gathered a few sayings:
What are these quotes talking about? I saw three trends:
These trends have long been observed in the market, and I believe that they are not directly related to sanctions. In my opinion, the industry is just growing up, the quantitative growth is being replaced by a qualitative one: we need to not only fight for partners - they must be helped to survive, we must be able to change our product portfolio quickly, we must pack our margins into related services.
How to achieve all this? Options for the sea. You can build the perfect logistics, or it’s best to agree with the manufacturer and attract partners for the price, or to intensify the sales process and make your sellers run faster and faster, or to drop the ballast of unprofitable products. But you already did all this, right?
When the stages of putting things in order, increasing efficiency, increasing the level of automation are exhausted, you have to look for new directions of development. Here is one of them.
I come from the Soviet era. I remember how it was possible to catch a bucket of fish in a nobody’s pond. And I understand very well the difference with what is now: if you want to catch fish - either go to a paid pond, or create your own pond and grow it there. A good demonstration sample is in the Skolkovo business park, although the fish there are still small, have not yet grown. Translated into the working language, if you want to have good, solid partners, create an affiliate community for them , or turn to someone who has an affiliate network with the partners you need.
The essence of the partnership community is cooperation, in which each participant receives more benefits than invests efforts. First of all, it concerns training, the accumulation of knowledge and competencies. For example, as it was in the Toshiba partner community .
The main difficulty of the proposed solution is that it is not enough just to create a reservoir - an affiliate portal or an automated order-taking system - and wait for life to begin in them. We also need to invest our energy, create conditions for truly open relationships, demonstrate our partners' willingness to work in a new way, invest in their competencies, and be able to build a partnership community management system. And to understand that the result will not come immediately ...
I quote Andrey Skvortsov, director of the RRC distribution company : “At the beginning of the year, the CEO of one of our partner companies turned to me. Asked for help getting a job. We talked. He complained that he was on the verge of ruin. What does not see the prospects for themselves and their employees. It turned out that he did not use either our warehouse or the credit line, but in order not to lose customers, he purchased everything from us on a prepaid basis and put it in his warehouse. For a company of its size, it is very difficult to create a warehouse for all occasions. So it turned out that there was a very significant cash gap. As a result, they made him a framework agreement with a deferment. Now his volume of purchases from us has grown significantly, and he even increased the number of his employees. Extra charge? The extra charge is ordinary, but the value is extraordinary. It is a pity that partners can evaluate partnership only in extreme situations!"
Of those IT distributors, I know, the RRC first to create its Affiliates. We help them with this . We’ll tell this story another time.
Vladimir Ivanitsa Facebook | LinkedIn
Recently, I often hear complaints that many companies are closing down and there are fewer and fewer partners, and there are only a few reliable ones. After reviewing reviews of the life of distribution companies and talking with acquaintances of top managers from IT companies, I gathered a few sayings:
- “The number of Russian partners with whom the company works has decreased ... if earlier two or three new ones were formed on the site of one broken-up company, now this is not observed”;
- “The share of integrators that bring added value is reduced, they are washed by online stores”;
- “Initially, non-computer retail chains begin to sell IT products”;
- “Migration of margin to the ecosystem formed around popular products: the greatest profit is not brought by them, but by a variety of related products and services”;
- “Half of our sales were deliveries to large corporate customers. Now they are purchasing directly from the vendors ” ;
- “The trade turnover of Russian-Chinese trade in the main groups of consumer goods decreased by 70%. The situation is aggravated by the fact that, in addition to demand, marginality has also decreased ” ;
- "The trend is the offensive of Asian manufacturers, which are able to withstand the US already in the corporate sector."
What are these quotes talking about? I saw three trends:
- Manufacturers and distributors become less capable partners (resellers, dealers, sales agents), but new partners from other markets appear;
- The growth of Chinese imports is falling, but at the same time, Chinese suppliers are gaining a share from the US;
- The margin from the supply of products falls, but it can be taken from related services, if only your affiliate network will be able to sell them to the end customer.
These trends have long been observed in the market, and I believe that they are not directly related to sanctions. In my opinion, the industry is just growing up, the quantitative growth is being replaced by a qualitative one: we need to not only fight for partners - they must be helped to survive, we must be able to change our product portfolio quickly, we must pack our margins into related services.
How to achieve all this? Options for the sea. You can build the perfect logistics, or it’s best to agree with the manufacturer and attract partners for the price, or to intensify the sales process and make your sellers run faster and faster, or to drop the ballast of unprofitable products. But you already did all this, right?
When the stages of putting things in order, increasing efficiency, increasing the level of automation are exhausted, you have to look for new directions of development. Here is one of them.
I come from the Soviet era. I remember how it was possible to catch a bucket of fish in a nobody’s pond. And I understand very well the difference with what is now: if you want to catch fish - either go to a paid pond, or create your own pond and grow it there. A good demonstration sample is in the Skolkovo business park, although the fish there are still small, have not yet grown. Translated into the working language, if you want to have good, solid partners, create an affiliate community for them , or turn to someone who has an affiliate network with the partners you need.
The essence of the partnership community is cooperation, in which each participant receives more benefits than invests efforts. First of all, it concerns training, the accumulation of knowledge and competencies. For example, as it was in the Toshiba partner community .
The main difficulty of the proposed solution is that it is not enough just to create a reservoir - an affiliate portal or an automated order-taking system - and wait for life to begin in them. We also need to invest our energy, create conditions for truly open relationships, demonstrate our partners' willingness to work in a new way, invest in their competencies, and be able to build a partnership community management system. And to understand that the result will not come immediately ...
I quote Andrey Skvortsov, director of the RRC distribution company : “At the beginning of the year, the CEO of one of our partner companies turned to me. Asked for help getting a job. We talked. He complained that he was on the verge of ruin. What does not see the prospects for themselves and their employees. It turned out that he did not use either our warehouse or the credit line, but in order not to lose customers, he purchased everything from us on a prepaid basis and put it in his warehouse. For a company of its size, it is very difficult to create a warehouse for all occasions. So it turned out that there was a very significant cash gap. As a result, they made him a framework agreement with a deferment. Now his volume of purchases from us has grown significantly, and he even increased the number of his employees. Extra charge? The extra charge is ordinary, but the value is extraordinary. It is a pity that partners can evaluate partnership only in extreme situations!"
Of those IT distributors, I know, the RRC first to create its Affiliates. We help them with this . We’ll tell this story another time.
Vladimir Ivanitsa Facebook | LinkedIn