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Finding Vertical Distributor
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
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