Expert Speak

Pinching Direct Sales? Get On With It

Direct Sales

In the past few weeks, the direct selling demon has reared its ugly head again. This time it’s worse than earlier instances when the channel decided to take tough stances by turning to active protests like boycotts, etc. (In the coming days you’ll hear another channel association raising its voice in this regard, following one by Pondicherry’s ITTA against discretionary policies of Redington a few weeks ago.) Many more factors have added up to act against the reseller. And I wonder when you can safely sit back and relish a victory!

Unlike earlier, you really can’t differentiate one principal from another in terms of degree of direct selling. Most principals now have multiple national distributors in their ranks, not just 1-2 exclusive ones but, in some instances, as much as 5-6. And fewer customers look up to their “preferred solution provider” for technical and commercial advice when they can get it cheaper “directly”. Principals have become stricter on the eligibility criteria for partners. And, the mushrooming and omnipresent retail channel. The paradigm for the traditional IT channel seems to have turned on its head.

Not that we didn’t see them coming.

To all those in the channel community who say vendors’ direct selling policies are hurting them, I would like to ask, “If you are in business for the simple reason that it has to bring you money, aren’t these steps justified for a principal who is in business for the same reason?”

Let’s admit it, the channel is not as important for the vendor-principal any more since much of the customer segments and territories have been touched. They only need fulfillment partners; the age when the onus of market development was left to the partner is long dead.

One of my friends typifies the trick to overcoming this dilemma. He has moved on, not once but twice and I am sure this will happen again the moment he sees revenues/profits dip. From attending to corporate customers in a Mumbai suburb, he had shifted focus on to retail. Now, he is stepping back to corporate selling again but on a different level. He is selling MTNL’s broadband services and routers from a prominent networking vendor, a long journey from assembling and services PCs.

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