Very recently, one of the Kolkata-based resellers informed that only resellers dealing with huge volume of products have been able to see good profit in 2007. Many resellers will switch over to other business if the same situation continues. Corporates are turning towards establishing direct relationship with the vendors, which is affecting channel business.
Well! Genuine problems are there. But, have the resellers who are thinking of winding up their business analyzed the causes behind their slow or low or no growth? Almost in all Indian cities and towns, there are resellers associations. Also, there exist a few federations. However, many resellers confess the competition among themselves is tremendous, thus, the profitability is decreasing.
If so is the case, then the question arises what are the associations or federations doing? True that they cannot stop entry of new players in a certain market, however, they can obviously raise the image of their team members by creating a wave (assurance) of trust, reliability and value added service among the customers in their own area. Besides occasionally organizing some IT Mela or arranging some platforms where the buyer and seller meet, each and every association has to see that their members do not end up competing among themselves.
Modern trend is to see every business dealing from the service point of view. Pricing is one area, if the local associations fail to fetch uniformity in that in its operating area, then every member will get affected either in the short or in the long run. Thus first of all, federations and associations need to set the pricing policy (uniformity in commission/discount/rebate ) for all members under their umbrella. This is a considerably large force to make the things happen.
Secondly, how much stress is being given on building up loyalty among the customers? Associations have to brainstorm the existing and the would-be (focus on young ones in educational and other institutions) customers in their respective operating areas.
Thirdly, establishment of a strong horizontal distribution chain among the members of an association may be thought of. Whereby, each reseller can exercise control over its overdraft and relieve it from capital blocking.
Fourthly, in order to survive in today s competitive business environment, every reseller needs to think of adding value to the products that they sell.
With the rapidly thinning demarcation line between IT products and other electronic products (for entertainment or hobby), last but not the least important thing to do is widen your definition of IT products.
According to a recent survey report of IDC, economic uncertainties and downside risk will dampen IT spending growth in the U.S. and elsewhere. Consequently, worldwide IT market growth will be a moderate 5.5-6.0%, down from 6.9% in 2007. However, the report categorically states, vendors will increase their focus on the “BRIC+9″ countries (Brazil, Russia, India, and China plus the next nine important emerging markets), where IT spending growth will remain strong. The SMB sector will get similar attention as suppliers seek out additional pockets of spending. Why won t Indian channel partners be able to reap benefits from the transition?