Automating the supply chain has produced efficiencies up and down the channel but the buck often stops with the local reseller. Although extranets and marketplaces that promised fast, efficient delivery of catalog and pricing information basically eliminated the need for phone calls, they carry their share of headaches when the local reseller who deals with multiple distributors, likewise, deals with multiple automated systems.
Consider the case of
Onsite Technical Services,
a regional reseller based in Seattle, who very nearly torpedoed hardware sales altogether because of the burden that these "efficient" supply chain mechanisms placed on its end.
Although only six years old, Onsite Technical Services has established a base customers ranging from small businesses to enterprises with thousands of employees. It sought to be a one-stop shop—selling and installing hardware and networked computer systems, offering support services and offering onsite temporary and professional placements.
But hardware had become a dubious proposition. Margins, as all resellers know, are low to begin with. So low that, for Onsite, the manpower required to collect comparative product and pricing information from various distributors, assemble it into a price quote, get that quote to the customer and track the ordering cycle was consuming what little margin they did make.
Although the supply chain had been automated by distributors upstream, the process on the reseller's end remained largely a manual process that delayed the delivery of quotes and was prone to errors. It required gathering FTP data from distributors that was then copied and pasted into Word and Excel templates to produce the price quotes.
"For us the margins were so low we could not justify going through all that effort," said Steve Strong, president of Onsite Technical Services. "While we didn't want to lose control of the hardware, because we do a lot of installs and post-installs, we were either going to give up selling the hardware or we were going to have to figure out a different way."
Next page: An ASP solution
Enter CNET Channel's ChannelOnline Service, a service provider that automated the process for them.
According to Eric Lundin, Regional Manager of CNET Channels, the service is designed "to address the challenges that VARs such as Onsite Technical Services have been facing for many years and to provide a scalable way to grow their business and increase customer satisfaction." He compares the business model to that of the successful sales automation ASP, Salesforce.Com.
CNET Channel began in 1999 when CNET networks acquired a 14-year-old Swiss company with expertise in gathering product data. Since then CNET has built out that database and added tools and solutions to provide solutions to the entire channel. In 2001, it launched the ChannelOnline service.
The service automates the reseller sales cycle, pulling information from a variety of distributors to allow sales reps to view comparative product and pricing information and assemble price quotes in a single screen, easily track orders and store customer history to a single location. An entry level license costs $198 per seat per month and free demos are available online.
Strong saw and demo and decided to give the service a try before taking more drastic action.
In 2002, Onsite deployed ChannelOnline's service ShopOnsite.com, a customized e-commerce site that integrated with the company's main Web site at www.onsite-nw.com. Through ChannelOnline, Onsite customers are now able to centrally access its distributors—D&H, HP PartnerDirect, Ingram Micro, SYNNEX, Tech Data—to retrieve up-to-date product, pricing and catalog information, view and compare it on screen and incorporate it into quotes. Using the e-commerce site, Onsite can access price and availability data on more than 300,000 SKUs bringing comparative product and price information, including suppliers' costs and availability.
Onsite's sales volume has risen 500 percent since the system has been in place. "We have so many fewer errors and now customers can call and we can turn around a quote in a matter of minutes," said Strong. "With the huge efficiencies gained in quoting and order processing under ChannelOnline, we can afford to accept lower product margins and compete successfully with major e-tailers."
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