Secondary Market Supplier Turns to Channel at Both Ends

Network Liquidators, a supplier of used network hardware, launched a program for VARs to help them bring wares in the front door and out the back.

The company finds VARs a useful source of used product procurement and expects their ranks would be an equally efficient route to market, said Joe Serra, Network Liquidators’ executive vice president.

Network Liquidators did $30 million in revenue in 2005 without a formal VAR program to encourage channel participation, but Serra said the company hopes it can bring in new business with the reach of partners.

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The VAR program will provide a sort of deal registration to provide VARs some assurance that the deals they bring are the deals they keep, according to the company. Network Liquidators does sell direct but won’t compete when a deal is registered, Serra said.

VARs may build any margin they wish into both ends of the product cycle, he said—VARs get a quote from Network Liquidators to purchase used equipment from an user but can pass on as much or as little of the price to the customer as they wish. “The deal is with the VAR, not the customer,” Serra said. Conversely, when purchasing equipment for a project, VARs may add any margin they choose, he said.

But most pass on savings, finding the added service is a value add and a competitive differentiator.

Network Liquidators sells product at 50 percent to 80 percent of manufacturer suggested price.

As enterprise IT organizations do end- and beginning-of-year inventory assessments, December and January are the busiest months for equipment disposal and purchase, Serra said.

Programs like network liquidators are not for shoppers on the cheap, Serra said, but for customers trying to keep the network operational and within a total cost of ownership by stretching the lifespan to the point where product is hard to source, he said. VARs serving such a customer would benefit from Network Liquidators, he said.

Network Liquidators tests all its wares and ships them with diagnostics.

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