VAR Exec? Working harder than ever for less money? 3 tips that will change your profitability over night!
Running a reseller doesn’t need to be such hard work. I know many great people who are working their socks off running VARs (and MSPs for that matter) who are not enjoying the success they deserve. Plus, many are struggling with cash flow and most don't know how to build real business value and achieve above average valuation multiples. I want to help put things right.
Making decent money and increasing the value of your business doesn’t necessary mean throwing everything out and starting again – it’s about selling things differently as opposed to selling different things (that said, the odd different thing is also good).
It's about thinking DIFFERENT not differently.
So here are my TOP 3 TIPS to help you make more money faster … (I'm keen to hear what you think) ...
My #1 tip …
If you sell kit, sell it on a lease (or "as-a-Service"). Hold on ... Don’t turn away yet! I know of many resellers making MEGABUCKS from simply selling kit via a 2-3 year lease. I was first introduced to leasing when I was Managing Director of Bytes Document Solutions – we sold good old fashioned printers … yes, before founding Boost Technology I used to be a “photocopier salesman” – don’t knock it … we T/O'd £20m and made great margins, 30-40% - from selling printers. When you're used to selling kit via a lease I don't think you'll ever go back to cash.
If you sell kit on a lease you get paid instantly from your leasing partner = much better cash flow!
The same is happening now with laptops, iPads, and pretty much every other device. Give me a shout and I’ll tell you how to do it. Device-as-a-Service is gaining momentum but don’t limit your thinking to PCs, and don’t get hung up on DaaS – Think DIFFERENT!
My #2 tip …
In addition to selling kit, sell air time – particularly if you’re selling tablets, or phones! It’s really easy to do (I mean, EASY!) and can make you anywhere from 45-55% margin. Your customers will already be buying airtime from someone, so you may as well offer it!
Selling airtime makes your clients a LOT more sticky = better valuation multiples!
There are some great partners on the market that can help you. This really is a no-brainer … just because the market is conveniently segmented into tech suppliers and telcos suppliers doesn't mean you have to be one or the other as often your primary buyer will buy both. Don’t think like the market – think DIFFERENT. Your customers want to buy iPads and want an airtime solution. Sell both! The more things you can sell your clients, the stickier they will be.
My #3 and final tip …
Sell second hand / refurb kit alongside new kit. I know, it’s not “sexy”, but there are plenty of customers that will buy from you – trust me, I have met many resellers making a lot of money from selling second hand kit. Devices (particularly Apple kit and the newer surface devices) last longer than they did 10 years ago and customers know it so they are more open to buying second hand kit. Did you know refurbished Apple kit, for example, still sells for around 70% of it's original price? Just take a moment to think about that! – that’s a LOT of money! And the cost to you is a fraction of the cost of new. The Result = materially more margin per device so you don’t need to sell as many to make the same money (and you have more chance to add a warranty plan too)! Think DIFFERENT.
In summary ...
Being a Reseller can be highly lucrative – you just need to tweak your model a bit. Not a lot – it’s not magic!
Selling kit on leases + selling airtime can materially boost your cash flow, your valuation multiples and make your business more attractive!
I have a few other tips for you … if you want to hear them drop me a line and let’s meet for a coffee! My team at Boost Technology can help you design a value-enhancing proposition and provide all the necessary specialist demand generation, sales education and sales enablement services needed to breathe new life and profits into your business.
Let's talk this month! Email me now - firstname.lastname@example.org.
Get in touch. Be different.