Post #1

02-08-2005, 12:46 PM
MylesJ
Newsletter/Forums Member

Does anybody know a distributor or regional VAR that does real verticals? I've been contacting some that claim to do verticals. Their idea of a vertical is general accounting. My idea is realtime operation of a specific industry. In our case this is mechanical service and repair (cars, trucks, bikes, boats, etc.). We built a small group of VARs last time around and sold about 3,000 seats of the previous program. The new program is less expensive, requires less of the local reseller post sales and has higher margins. It uses SQL Server/MSDE.

We worked with Ingram and Computer Associates in the past with marginal success. I'm not looking for that size of distributor.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977

Post #2

02-08-2005, 01:33 PM
Ken Beam
Moderator

You're going to have a real stuggle finding VARs with such a narrow industry niche I'm afraid. Their interests generally run towards a specific technology and will dip into industry verticals, such as ERP, CRM, Supply Chain, Portal skills with expertise in Health Care, Insurance, Retail, Manufacturing and so on.

If the product is not a big ticket item with a services component (revenue) that would at least equal the cost of the expensive application there's just not much appeal to them.

Small regional VARs are typically known for their infrastructure capabilities with an emphasis on Security, Messaging, LAN/WAN/SAN certifications and other general SMB IT requirements.

Smaller ticket items requiring a minimum of support are being found in the CDWs and other online retailers; but, as quasi-distrubutors and order takers they'll never generate incremental dollars for you.

These observations are all painted with a broad brush stroke, but fairly representative of the reseller marketplace as it is today.

Channel Cheers,

Ken

__________________

Kenneth G. Beam
Team Captain
The VAR-City
" ...solving the Partnership Puzzle"
Phone: 972.240.8793
Web: http://thevarcity.com
Email: kbeam@thevarcity.com

Post #3

02-08-2005, 03:01 PM
MylesJ
Newsletter/Forums Member

I know most of what Ken says is true, but I figured you guys would be in the best position to know of someone. We have structured the product so that the reseller should end up doing the network support and integration. There are a lot of products in this market that all need to run on the same network. No vendor in the market supplies this kind of local service. The reseller that supplies the shop management software usually gets to be the IT department. The shops run live connections to parts houses, to repair information databases, to recall databases, to Carfax and other providers in addition to the work done in house on the shop management system.

The better resellers on our last product sold about 100 copies of our product and about half those customers have stayed as long term support customers. Our deal with them was providing an extra 20% margin to fund local marketing efforts.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977

Post #4

02-09-2005, 09:12 AM
pmorettini
Moderator

Myles,

My experience is that it is very possible to find small, vertically focused distributors internationally, but almost impossible in the US. What Ken says about the reseller (VAR) market is very accurate.

__________________

Phil Morettini
PJM Consulting
phil@pjmconsult.com
858.792.1062

Post #5

02-09-2005, 11:46 AM
MylesJ
Newsletter/Forums Member

Can you point me to is disty like this in England, India or Australia? I have one reseller running a beta right now in England and one considering it in India.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977

Post #6

02-09-2005, 01:32 PM
Charles Mills
Principal Moderator

Take a look at http://SoftDatabase.com .

__________________

Charles
CharlesMillsConsulting.com
StrategicDueDiligence.com

Post #7

02-09-2005, 01:51 PM
pmorettini
Moderator

It's not that simple, unfortunately. Charles points you to a good place to start, but as others have pointed out, you are in a very narrow niche. My guess is that you won't find anyone in that database that's suitable. You needs someone who is active in your marketplace. Simply signing a "generic distributor" will be highly disappointing. You need to dig around a little be to find that. You are likely to be pleased if you find someone entreprenurial, probably small, who will "act in that country as you would in your own". Someone who will develop the market in that country, not an order taker like you normally think of distributors. This takes a bit of doing. Start networking with people in your industry, and ask about people who might be suitable. If the market is really thin you might even have to go with someone who is capable and interested in becoming a distributor, but isn't currently in this business. Think creatively, and start talking to people in and around your vertical - other complementary software suppliers, the VARs you are talking to, end users, Industry experts, etc. A great way is to attend a trade show in that country--people in will often find you when you do.

__________________

Phil Morettini

PJM Consulting

phil@pjmconsult.com

858.792.1062

Post #8

02-09-2005, 02:06 PM
Charles Mills
Principal Moderator

I should have also mentioned that several of our moderators in this forum are consultants in the distributor relationship business, and might be able to help you -- for a fee, of course. The moderators in the International forum are in the International sales consulting business as well.

Also, you could try a listing in our Jobs & Partners forum.

__________________

Charles
CharlesMillsConsulting.com
StrategicDueDiligence.com

Post #9

02-09-2005, 03:17 PM
Dave45000
Newsletter/Forums Member

Why don't you ask your customers who they buy from?

The next thing to do is to look upwards to the top of the industrial category for the supra category. In oil and gas the ultimate parent is resource extraction. The supra is sufficently similar and much larger spanning many different verticals. The supra might have a distributor large enough for you.

Accounting can be horizontal or vertical depending on how specific and partitioned the accounting requirements would be.

David Locke

Post #10

02-09-2005, 04:10 PM
MylesJ
Newsletter/Forums Member

In the US we run roughly one tech per 300 families, so roughly one shop open for 2,500 families, if you limit the market to auto and light truck businesses. Figures go from 100,000 to 300,000 potential customers in the US, depending on what figures you use. The new product is appropriate for about half that market. The dealers that have been selling our products for years are local VARs who wanted a local market they could own, not people associated with the automotive industry. The local warm body is what the customer needs to commit. I can get them 90% of the way from here. If we were selling $20,000 systems then direct sales would be better. If the $1Kto $6K market it needs to be someone local.

We've been participating in the catalog show section of some US trade missions which is where the overseas contacts I have were found. There is one big trade show in Europe but $30,000 and a months focus is not a good idea for us. The main US trade show is not until November.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977

Post #11

02-09-2005, 04:13 PM
pmorettini
Moderator

So these local VARs are also selling into other verticals?

__________________

Phil Morettini
PJM Consulting
phil@pjmconsult.com
858.792.1062

Post #12

02-09-2005, 05:17 PM
MylesJ
Newsletter/Forums Member

Some sell into other verticals, some have picked up other products in the auto/truck area like body shops (completely different paper trail from mechanical) or combined gas station/convenience stores.

We co-operate with two companies that sell F&I software to small car dealerships and used car dealers. Sometimes we get there first and sometimes they do. We are currently adding features to allow realtime access to the inventory of the largest import parts reseller in the country. That company is not interested in any affiliation with any service management vendor.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977

Post #13

02-10-2005, 08:43 AM
pmorettini
Moderator

Have you talked to the other 2 companies about what they do internationally? You may be able to leverage any efforts they have made. If they've down nothing you may be able to band together to "find or create" distributors in countries you'd like to attack.

__________________

Phil Morettini
PJM Consulting
phil@pjmconsult.com
858.792.1062

Post #14

02-10-2005, 09:42 AM
MylesJ
Newsletter/Forums Member

Neither of them has any interest in a larger market. They are more interested in the service revenue than the product revenue. One of them is a Canadian company so we make a little progress there. I know that the Canadian guys have been through several hires trying to find the right skill set. Another Canadian company in the F&I market has just gone away so they are focused on picking up those customers.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977

Post #15

02-10-2005, 10:15 AM
Dave45000
Newsletter/Forums Member

How would your product enable them to generate more demand for services?

David

Post #16

02-10-2005, 11:07 AM
MylesJ
Newsletter/Forums Member

For the F&I people, it would take them from a 4 to 6 user network to a 10 to 25 user network. It would get them training time on MSExcel and MSWord. It lets the sales people add options to new cars. It lets them dicker with used car buyers over what improvements can be made at what price when they can pull up the price and time to make those improvements from the shop system. This increases sales and everything that goes with that, like training new hires, etc. For the customer we provide tracking of services not done, services due, emailed, and printed reminders to increase service department sales. We provide comprehensive pivot table analysis so that shops can find and persue the highest margin jobs.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977

Post #17

02-10-2005, 11:54 AM
pmorettini
Moderator

One last idea for you with respect to international distribution and thinking creatively. I'm sure that you have print publications or websites which the endusers of your product read. Put a small ad in one or a few of them: "Auto Service Shop Software Provider seeks distributors in select countries worldwide. Exclusive territories available. Contact..... for more information at....."

See if it generates any interest. It may seem to be a bit of a longshot, but shouldn't cost you much. You may get no responses, or alot that you don't care to get that you have to wade through. But with a little luck you also might get someone with experience in your industry, who happens to be software-savvy and entreprenurial-minded. IMO, this could be a great match for a vertical supplier like you.

__________________

Phil Morettini
PJM Consulting
phil@pjmconsult.com
858.792.1062

Post #18

02-10-2005, 12:09 PM
Dave45000
Newsletter/Forums Member

Adding to what Phil suggested, you could go with a contextual ad. These ads appear on results lists for certain keywords. These would be seen globally and in a lot more topic categories. Do this after you run an ad at your own site.

David Locke

Post #19

02-15-2005, 11:21 AM
ytekale
Newsletter/Forums Member

in India?

Myles,

i know the indian landscape relatively well and i am surprised that you have a potential reseller with such a focus? i wld have thought if such focus is rare in the US and UK, it would be rarer still in India, and i am not sure if the indian market is mature enough for this

yadu

__________________

yadu

Post #20

02-15-2005, 12:56 PM
MylesJ
Newsletter/Forums Member

If you think of our products as providing 80 to 90% of the function of ADP or Reynolds and Reynolds at 10% of the price you can see how that would be attractive to a market such as India where vehicles sell for 10 to 20% of US and European prices. We've had features that the big guys don't pick up on for years. We had a feature that came out in the mid 80s that Reynolds added as a big new feature to their 2000 version. They sell a comprehensive turnkey in the $80,000 initial price range. Our product combined with MS Office and Quick Books (or other accounting) is far less expensive and has features that they do not have.

__________________

Myles J Swift
Computer Assistance Inc.
Auto/Truck Repair Management
Software since 1977