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Why Hardware Sales Alone Won’t Pay the Bills (And What To Do About It)

Steve Stark

If you’re still trying to make ends meet by focusing on hardware sales, chances are you already know that it’s not exactly the best way to grow your business.

In fact, every quarter you’re probably losing the hardware sales battle to online vendors who can undercut your prices and exceed your stocking capabilities.

“The problem is so bad that many end users are going right to online marketplaces and cutting partners out,” says Steve Stark, former director of VAR Sales for NetGear. And as for what customers really need from a partner, “I’ll never forget the answer I received from a school district CIO in the Boston area a year ago after I asked ‘How important are VARs to your future?’” says Stark. “This CIO said that he had hired a crew from the local Apple Store to staff his IT department simply because they were more people-friendly and his previous IT engineers had come across [as] too condescending to his constituents.” But the downside to this was that none of those former retail employees had any idea what sort of IT his company should invest in to prepare for the future. “What this CIO needed most from a VAR was someone who could assess his infrastructure and help him plan an IT strategy over the next two years,” Stark said.

VARs who can provide consulting services like these have a better chance of surviving the next two years, too. In fact, as many as 33% of VARs may just find themselves out of business simply because they can’t shift their business model away from hardware.

Stark’s advice? “Augment with a services model,” he says.

But, for most VARs, it’s too costly to add technical resources and hire IT engineers who can perform assessments, design future-ready infrastructures and deploy and manage IT solutions for customers.

“It’s not cheap to make that shift,” admits Stark. “The average VAR might have to invest as much as $300,000 to start a services practice from scratch. But that’s not the only hurdle. If you can’t build your clientele quickly you can’t reap the benefits of that new services business.”

So, what can be done? Here are some practical suggestions:

“Convince your customers to move from on-site equipment to off-site/online cloud-based data,” says Stark. “You’ll save your customers money in the long-term and provide them with an affordable monthly fee that you can use to boost your own bottom line.

Of course, in this scenario, you’ll need to transfer customer data and applications into the cloud, which as you might have guessed, isn’t easy.

Ingram Micro Professional Services

That’s where Ingram Micro’s Professional Services team can help.

“Ingram Micro’s Professional Services offering can take all the barriers away from shifting to services,” says Stark who now serves as Ingram Micro’s Sales Director, Professional and Training Services. “Our team can handle the assessments, the deployment and even provide the training you need to launch your services business and transition away from the hardware-only business. So, there’s no need to invest thousands of dollars to hire, train and launch a services practice on your own. We have the people, the expertise and the services you need.”

Interested in making the shift from hardware to services? Here’s how Ingram Micro’s Professional Services can help:

  • Training: For technical background to understand the technology and learn how to design solutions that benefit their business, regardless of vertical market or size.
  • Expert services: Our team can provide IT security penetration testing and wireless assessments, deploy data centers and more, acting as your employees with no overhead costs. You earn higher margins on delivering those services; we do the work.
  • Deployment services: Need to roll out a large retail network or deploy a POS system for a chain of stores that have locations across the nation? We can handle that.
  • Marketplace: Partner with another VAR who has expertise in areas like data capture/POS, physical security, etc. Or share your own expertise with them. Ingram Micro takes care of the payment, service agreement and invoicing. If you’re the service provider, we pay you for your work right away so there’s no need to worry.
  • Technical consultants: We’ll sit down with you and help you create a strong business plan and identify new opportunities to expand your services business and help you prepare for the future.

Ready to start? Contact the Professional Services sales team at proservices@ingrammicro.com or (800) 456-8000, ext. 76094.


Blog courtesy of Ingram Micro. Read more Ingram Micro blogs here.

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