Pros and Cons of Using a Reseller for Networking Equipment


There are various advantages  for using a reseller when purchasing networking equipment.  There are also benefits to buying direct from the Manufacturer. Below we detail those trade-offs with some intelligent introspection.

 

Reseller: Logistics, the reseller holds local stock, and takes care of taxes, tariffs, currency fluctuation in your region.

Within the US and Canada  and other common trading partners, there may be no logistical advantage for ordering from a reseller over  a direct purchase; however if you are in a remote country where most products must be imported it is almost  a necessity. Some countries have less than above-board customs,  and taxation rules, dare I say bribes. In these cases,  a  local reseller who specializes in local corruption etiquette is a necessity .

Reseller: Local Support, easy to reach technical support in your time zone, training, returns, and trials.

A well-trained reseller who  exclusively  handles the product you are purchasing is essentially an extension of the Manufacturer. Think of Automobiles. This complex and expensive product to support, could not exist without a large dealer network. In the world of Networking equipment , some things are becoming  more of a  commodity , routers  ,firewalls, and thus, diminishing the need for a reseller. Buying through a channel and the associated mark up may not be worth the added value ,especially if the manufacturer  offers good direct support , and an overnight replacement policy.

Reseller: Pre Sale Product Knowledge, a good reseller will educate and explain options for the products they represent.

The potential downside here is that often the Reseller is motivated by the Equipment they give them better OEM incentives to sell, hence if they are selling more than one product line, they may actually downplay one over the other.

Reseller: Representation to the manufacturer , for new features, re-calls

The reseller often times can carry clout to represent you back to the Manufacturer since they represent many sales , they can be very  beneficial if you have a problem that needs to be resolved by the manufacturer .

Reseller:  Requirements for competitive bid, or government contract dictating approved venders

Companies that provide this type service are generally puppets set up by a government agency , often out of political need to create jobs.  If you work for a government agency that forces you to buy through an approved reseller , you are likely well aware of the game.

Reseller and Manufacturer: Personal Relationships

Having  a trusting relationship with the person you purchase equipment from is the tried and true way of doing business in many industries, and often these relationships trump all other factors.  I personally try not buy based on relationships because I feel it is a disservice to my employer, hence I keep them at arm’s length.

Manufacturer: Price Price Price

Buying direct from the Manufacturer should give a major price break. Any product purchased through a reseller channel is going to add a minimum 35 percent to the direct price and often even double or even  triple, depending upon the product and number of hops in the channel. OEMs and channels partners have had a love hate relationship since perhaps biblical times. As mentioned above, personal relationships are the key to most sales in many industries,  and for this  reason  manufacturers must rely on a local sales partner. On top of that, there are also agreements that manufactures sign so as not to undercut the local reseller price, hence the end customer has no choice but to purchase through a reseller. For many traditional products. However new companies  coming on the market are often going direct to get a pricing advantage, after you talk to your reseller for a product  be sure and do some research on your own and look for similar products sold direct, the price difference could be significant.

Manufacturer:Support

Why is it that Cisco’s best customers  are provided with direct engineering support?  The answer is simple, because it is better.  If you can get direct support take it.  I’ll leave it at that.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: