This may belong in the sandbox forum but it is a good enough topic to bring forward.
I can partly understand why this part of the channel hasn't been thoroughly covered. One of the big reasons is that the OEMs often compete directly with them. They sell direct. So when margins are tight--as they are--and competition is fierce, the OEMs will work on their direct sales first. Makes sense. There are other issues at play here too. From a larger perspective it's far easier to convince five or six mega-retailers to carry Tablets than 10,000 smaller VARs and resellers. This is a big deal when your organization has limited resources to promote the Tablet. But this strategy misses a big opportunity: That all of those VARs are potential Tablet customers themselves. These are highly fluid, small businesses often without rigid computerized systems. Lots of things are done by hand today. They are exactly the types of businesses where every employee should have a Tablet. But there is an issue with this approach--just like the big retails want you to show them the money--so do the little VARs and resellers. Often companies will provide significant discounts for early adopters on demo models. There's been nothing like this to date. Well, some of the OEMs will give you some percentage off, but it isn't much. A typical early adopter program might be buy one Tablet and get a second, demo-only unit for 50% off. Part of the problem is that the OEMs fear that if the discount is too great that the resellers will sell the demo unit and make money. Many do. But in the case of Tablets I'm betting many of these small businesses will see the value for themselves and keep them. Either way, the OEMs would have extra sales. Yeah, the times are tough and when you're scraping for pennies programs like these don't sound very good, but they are precisely the types of programs that would help the Tablet. In short order, you could have tens of thousands of happy Tablet resellers and their customers or possibly tens of thousands of resellers using the Tablets themselves.
Yep, competition against sales has been a typical scenario for the past decade. Everyone in the industry wants sales but they don't want to share the revenue.
The solution is simple. Direct sales must stop. Treat each reseller equally and then rely on the resellers to increase sales. Knock off the "tablet pc is special and requires the following fifty thousand forms before you can sell it ..." crap and also the sales volume committments. Who really cares if you sell 1 a day or 1 a month? In the case of the Tablet PC -- this "new" attitude will double sales in just a few weeks. Set the Tablet PC free.
Now that argument sounds very much like an argument against principles of competition but it really focuses on mechanisms to combat oligopolies that are controlling the industry. They are killing sales. Manufacturers must fight 'tradition' and set up new rules and boundaries for sales. Phew. It's a tough pill to swallow.
Tablet true love
06-26-2004, 08:03 AM
Similar Threads 
