Page 16 - Security Today, May/June 2022

Q. How do exclusive territories play into a vendor/reseller relationship?
AF. In the 2020s, geographic territories are not practical. The in- ternet has made the United States an open territory. Everyone can ship everywhere. In terms of vertical markets, yes, territories are in view. If we find a specialist reseller in the outdoor sports market, for example, that could be exclusive. Their expertise makes the vertical market exclusivity a fit.
JS. Yes to territories. If I’m going to spend time and money marketing a vendor’s product, I want to make sure those dollars come back to me in the form of leads and new business. Geo- graphic territories make sense in a small market like Canada. (Jeff is based in Ontario.) We provide vendors with a great deal of sales for that exclusively.
Q. Has the reseller/vendor relationship changed in the last few years?
JS. The pandemic and supply chain issues have played a big part in changing the relationship. We talked earlier about the promises made by resellers and vendors. Vendors broke their promise to sup- ply products when we need them. I’m not saying this was their fault, but this caused us to break promises to our customers. We couldn’t support the printers we sold because the vendors couldn’t supply the media (ribbons and cards.) It’s hard to re-establish that trust.
AF. As we’re building our business, we’re focused on reseller profitability. We know we will not be successful unless our resell- ers are profitable – and at a profit level beyond what they get from other vendors. It’s a primary priority of ours.
As ID card printers become more and more ubiquitous, there is less loyalty in the distribution channel. That’s not a good or bad thing, it’s just what it is. Essentially the ID card market is becoming like a grocery store – just pick the brand you like and put it in a cart. So, our focus on reseller profitability becomes even more important.
Q. How does the dynamic of a vendor selling direct to customers AND selling through resellers play out? Is it an inevitable conflict or can they work in concert together?
AF. There is a place for both channels. In North America, 65% of printer sales use old technology. The older technology is a good fit for eCommerce. There’s little innovation, so it becomes some-
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what commoditized. With higher technologies and innovation, resellers who have one-to-one relationships with customers have a distinct advantage. The more complex the installation, the more value the reseller adds.
JS. It is an inevitable conflict. I never sell a product that’s also sold directly from the manufacturer to the customer. Resellers can’t win in that scenario. If the vendor has a second product line that’s clearly distinct from the one we sell, that’s different.
Q. What else goes into building a strong distribution network?
AF. There’s a balance between finding the right number of resellers to provide broad coverage in the market, and providing a strong profit opportunity to each partner. For us, dealer profits matter most. That’s where our mojo comes from. If you have 100 resellers all offering the same printer solution on a particular bid, closing the sale becomes a matter of price. That doesn’t serve our resell- ers well. If we can stay competitive on price while adding unique, sought-after features, we’ve got an opportunity resellers look for.
JS. As a reseller, you have to have the capital for inventory, plus sales, marketing and service. There’s no point in being a reseller if you can’t support the vendor you’re dancing with. And you can’t dance with everyone. Capital is king in this marketplace. You have to have the money to stand behind your offering. There’s no more just-in-time purchasing. And it probably won’t come back.
Q. What is your future outlook?
JS. A few years ago, we went back to school for digital marketing management. We literally went to the University of Toronto for training in a foundational course about everything digital. We are competing in a world that sees Amazon as the gold standard for distributing products. We need to play at their level. So, we made some shifts, and it’s paid off.
AF. I will reiterate that reseller profitability is our present and our future. Nothing matters until someone sells something, and we need to focus on keeping our resellers happy and productive. That’s the whole ball game.
Alan Fontanella is the CEO of Advance Identity Corp., a vendor company built on providing products, services and know-how related to the creation and management of secure identities. Jeff Sharpe is the president and CEO of Avon Security, a security products reseller that services more than 25,000 customers, from start-ups to organiza- tions in excess of 300,000 employees.
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