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​Secret Reseller - Don’t tell me to change my business model

​Secret Reseller - Don’t tell me to change my business model

ARN’s partners inside the industry lift the lid on the real world of the channel.

I find it somewhat ironic when managers who have worked for large-scale multi-national corporations their entire life take me to one side and tell me to change my business model.

Apparently it’s so I will succeed in the ‘ever-changing business landscape’, or whatever we’re referring it to as nowadays.

As a business owner, I’m being instructed by people who have genuinely no idea of what it takes to run a small to mid-sized organisation.

Yet they think they have a divine right to offer advice and guidance on how to run my business, simply because they’ve read a few analyst reports. It’s almost laughable.

Vendors forever enjoy telling partners to ‘change this, change that, move to services and so on’, but very few of these ‘visionaries’ who I talk to have any substance to their argument - it’s simply superficial.

We all know the type. The ones that use opinion pieces in the channel press, or speaking spots at industry events to wax lyrical about the new ways to succeed, preaching adaptability as if it’s the first bright idea since fire.

Of course, there’s no doubt that the IT industry is changing, and that traditional practices are being outdated as the market progresses. If anything, my time in the channel has taught me that the industry is forever in a state of flux.

Yet also, it’s taught me that change is never as rapid as most vendors would have us believe.

Customers are going to continue to seek different solutions depending on IT maturity levels, with the vast majority of larger companies in the country still working through the lifecycle of previously-procured IT.

So my point is that if said customer purchased such kit from my business, then they still want my business to support it. This begs the question - how can I change my business into something new if my customers want the old me?

In fairness, most vendor advocates for changing your business model suggest bringing on new revenue streams gradually, but few seem to have suggestions on how to do this beyond buying their product.

Most vendors and distributors are even offering finance terms for bringing on certain services, and a few of my contemporaries have done some good deals on the back of such agreements. But to really transform a business, these deals are never enough.

Bringing on recurring revenue is all well and good, but compensating sales guys in this way - especially the long-termers - presents its own set of problems.

These guys want the big fat cheque each quarter, and drip feeding them recurring revenue does not sit well with what they have become accustomed to.

Naturally this presents a challenge around whether it’s wise to stick with loyal servants of the past, or move towards the new blood coming through in the future.

Notching additional strings to your bow is never a bad business strategy however, but when vendors bet big on new technology, they want as many partners as possible to come along for the ride.

But what’s best for the vendor is almost never best for the reseller.

Specialisation may be the catch- cry for the channel at the moment, and that’s all well and good, but throwing all of your eggs into one basket doesn’t sound like something Warren Buffett would do.

So I think I’ll hold fire on changing my whole business model for the interim.

This article originally appeared in the February issue of ARN magazine - to subscribe, click here


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