VARs in a catch-22 situation

VARs have been under pressure to add value to their offerings while, at the same time, control costs during the tech downturn.

Credit continues to be a challenge, particularly for small and medium-sized resellers. Financing is key to helping them participate in larger opportunities

they otherwise would not be able to.

One way VARs can do this is by taking advantage of distributor credit programs. Distributors, for their part, should offer a range of financial services to resellers, such as leasing, paying when paid, and unsecured and secured lines of credit.

VARs should get to know the people responsible for credit at their distributor of choice. By developing a relationship – sharing business plans and financial statements – resellers can work with distributors to grow their business. Perhaps they can negotiate a higher line of credit or come up with an alternative financing method.

At the same time, distributors need to pay attention to what VARs are saying. What do they need to help them grow their business?

GE Access, for example, found that its customers were asking for extended terms programs to help close more deals during the crucial last quarter of the year.

As a result, it’s offering 90-day interest-free financing on all security products purchased through Dec. 31. GE Access says this will allow the channel to offer customers additional payment flexibility and pull sales forward to make security sales grow this year.

It all boils down to communication. VARs need to communicate their needs and distributors need to respond to those needs and let resellers know what they’re doing to help them grow their business.

In other news, EMJ is now distributing LCDs from Sharp Systems of America.

Sharp’s LCD products include the Business line (for business and home users) and the Premium line (for more advanced applications).

This might be a market worth paying attention to, because – after years of hype – LCDs are finally starting to take off.

According to The Canadian LCD Market: The Growth Continues, authored by Michelle Warren with Evans Research Corp., the LCD market experienced phenomenal growth in the first quarter of this year. As prices continue to drop throughout the year, LCDs are moving from the high-end into the mainstream.

“”Corporate and government acceptance of the technology directly contributed to the success of the market in what is considered a strong quarter for government purchases through resellers,”” says the report. “”Pushing market demand and acceptance through increased marketing efforts and sales incentives were the display vendors, the IT reseller community and electronic retailers.””

According to the report, vendors are relying on the channel to identify business opportunities for the LCD market. Future success hinges on increases in corporate and consumer spending, as well as the ability of vendors to distinguish benefits of one product over another.

“”As resellers act as end-user sales and marketing arms of display vendors, establishing and maintaining these relationships are critical to the success of the display vendors in the Canadian marketplace,”” says the report.

Resellers are going to play an important role in the LCD market, not only in terms of finding business, but maintaining relationships with customers.

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Jim Love, Chief Content Officer, IT World Canada

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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