{"id":36155,"date":"2019-09-19T12:17:30","date_gmt":"2019-09-19T19:17:30","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=36155"},"modified":"2019-09-26T09:52:16","modified_gmt":"2019-09-26T16:52:16","slug":"partnership-potential-dealers-skeptical-about-doing-business-with-online-retailers","status":"publish","type":"post","link":"http:\/\/www.enxmag.com\/twii\/the-week-in-imaging-twii\/editors-blog\/2019\/09\/partnership-potential-dealers-skeptical-about-doing-business-with-online-retailers\/","title":{"rendered":"Partnership Potential? Dealers Skeptical About Doing Business with Online Retailers"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

When the news broke that Staples had acquired DEX Imaging\nearlier this year, many observers speculated that the buyer was primarily\nintrigued by the dealer\u2019s service component, and the industry is waiting with\nbaited breath to see how that will translate when fully enacted (note: DEX is\nstill hiring all across the country).<\/p>\n\n\n\n

Certain partnerships can make for strange bedfellows, but it\ndoes make one wonder. Given that an online retailer like Amazon has perhaps the\nbroadest reach of almost any business in the United States from a customer\nstandpoint, is there any merit to the old clich\u00e9, \u201cIf you can\u2019t beat them, join\nthem\u201d philosophy? Can money be made by partnering with Amazon, on a limited\nbasis, to handle SOHO and even residential service work?<\/p>\n\n\n\n

Actually, yes. But probably not enough to pique your\ninterest or make it worth your while.<\/p>\n\n\n\n

Check it out. Here\u2019s a link<\/a> to sign up and add your service competencies to the litany of independent Amazon service contractors. From installing interactive whiteboards to printer\/computer setup and various IT services, you can add your name to the list of local providers for a given discipline(s). You can even denote commercial business only to avoid dealing with the general public.  <\/p>\n\n\n\n

Judging by the breakneck speed in which Amazon is growing\nall parts of its operations, it wouldn\u2019t be out of the realm of possibility for\nit to expand upon its business services, which could open the door to a more\nsubstantial partnership opportunity. In fact, Amazon or other online retailers\ncould take the Staples route and make a national push with an acquisition of one\nor more companies across any number of businesses and verticals.<\/p>\n\n\n\n

In conjunction with the September state of the industry\nfocus, we asked our panel of dealers to ponder the proposition of selling\nthrough Amazon or relying on the giant to provide certain ancillary products or\nservices.<\/p>\n\n\n\n

Pros and Cons<\/strong><\/p>\n\n\n\n

\"\"
Kevin DeYoung, Qualpath<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cRelative to Amazon Business Services, I think there\u2019s going\nto be an opportunity. It\u2019s not even a question,\u201d noted Kevin DeYoung, president\nand CEO of Qualpath. \u201cOn the pro side, it provides business expansion. The\nscary cons of Amazon is what I\u2019ve witnessed relative to commodity pricing.\nAmazon wants to do business with organizations to have those organizations\nresell their stuff off of their platform. It\u2019s the wild, wild west on their\nplatform. You could have commodity X, and you\u2019re going to have thousands of\nother people selling the same commodities. Amazon is going to take their cut\noff of the sale, and you\u2019re going to have tremendous margin erosion in whatever\nyou do, whether it be a service or a commodity.\u201d<\/p>\n\n\n\n

Unfortunately, according to DeYoung, Amazon wants partners\nto provide 1,000 SKUs, and 99 percent of them wouldn\u2019t garner any action. On\nthe plus side, those 10 SKUs that do generate business could generate a strong\namount of business. Even there, a dealer might end up doing more at a much\nlower cost.<\/p>\n\n\n\n

\u201cThe question becomes, is that \u2018more\u2019 worth it?\u201d he posed. \u201cDoes that make economic sense for me as a dealer or me as a VAR\u2014that\u2019s really the question. That\u2019s always going to be the sticking point when you have a gorilla like (Amazon).\u201d<\/p>\n\n\n\n

AIS of Las Vegas, for one, is already doing business through\nAmazon. He sees the online giant as a possible partner for dealers who do not\nstray far beyond the traditional copier services and supplies, maintenance\ncontracts and products. For dealer clients who have a need for VoIP or IT\nservices, that partner could well be an Amazon.<\/p>\n\n\n\n

Control Your Destiny<\/strong><\/p>\n\n\n\n

\"\"
Dave Clark, AIS<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cBut I think most dealers know that they want to be in control of their own destiny,\u201d said AIS Vice President of Sales Dave Clark said. \u201cThere\u2019s nothing wrong with a short-term partnership to help your business grow. But there\u2019s going to come<\/g> a point where you scale so large that you\u2019re going to have to make a decision as to whether you\u2019re willing to take the leap of faith and go down this path to deliver these services to their client on their own.\u201d<\/p>\n\n\n\n

AIS does use Amazon in some one-off circumstances, but Clark\ncan appreciate the danger in relying too much on the retailer as a partner. It\ncomes down to stressing one\u2019s value proposition as a partner beyond the mere\noffering.<\/p>\n\n\n\n

\u201cAnybody can offer anything, but can you facilitate it,\ndeliver it, measure it, and improve upon it on a continual basis? That\u2019s where\nmost companies fall short,\u201d he said. \u201cAmazon helps people have a leg up. If\nyou\u2019re a small dealer and you don\u2019t have excess cash and you\u2019re looking to grow\ninto these types of things, it\u2019s an option. We use Amazon for cloud services\noccasionally, because sometimes the customer has requested it, or it\u2019s the\nright business decision in regards to backup, because the customer feels that\nthey\u2019re better partnering with Amazon or Microsoft rather than a third-party\ndata backup company.<\/p>\n\n\n\n

\u201cBut over time, there\u2019s a lot of great companies out there\nthat can provide the same type of services, and that\u2019s all they do. And because\nit\u2019s all they do, it lessens the risk of them getting into our clients. Whereas\nwe do use Amazon sometimes, I don\u2019t think that would be a standard for us\nbecause we realize that eventually, they\u2019re going to be a direct competitor of\nours.\u201d<\/p>\n\n\n\n

\"\"
Rich Brandenburg, DME<\/figcaption><\/figure><\/div>\n\n\n\n

For the time being, Donnellon McCarthy Enterprises (DME)\nhasn\u2019t seen a business model that makes sense for the dealer to engage with\nAmazon (or other retailers). Rich Brandenburg, senior vice president of sales\nfor DME, notes that many dealers in his space are struggling with how to be\nprofitable, which calls for an extra level of caution in deciding on different\nflavors of partnerships.<\/p>\n\n\n\n

\u201cThe traditional copier reps will go out and hunt everything\nthey can, and they\u2019ll make it work,\u201d he said. \u201cIn the IT space, if you mess up\nthe services side, you\u2019ll ruin everything else. So it\u2019s important to know, from\na strategy standpoint, that these are the things we\u2019re going to do, and these\nare the things we\u2019re not going to do.<\/p>\n\n\n\n

\u201c(Partnering with Amazon) is not something we\u2019re looking at\ncurrently, but you have to be aware of the changes that are taking place and be\nopen to conversations.\u201d<\/p>\n\n\n\n

Not Enough Profit?<\/strong><\/p>\n\n\n\n

\"\"
Kevin Morris, OneDOC MPS<\/figcaption><\/figure><\/div>\n\n\n\n

On the selling end, count Kevin Morris, president and CEO of\nOneDOC MPS, as one of those who believe the margins make it unworkable. \u201cI\nthink you\u2019re looking at a lean operation from the standpoint of how they sell,\u201d\nhe said. \u201cI can\u2019t imagine joining up with a group like that in order to further\nour business.\u201d<\/p>\n\n\n\n

Chip Miceli, president of Pulse Technology, feels the jury\nis still out on whether any variety of partnership would be beneficial. Regardless,\nit would be important for a dealer to have some built-in protections.<\/p>\n\n\n\n

\"\"
Chip Miceli, Pulse Technology<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cThe cons are if the larger entity, like Amazon, truly just\nwishes to penetrate the market and would attempt to do so at any cost,\u201d he\nsaid. \u201cThe pros are that there are opportunities for dealers to increase their\nshare of business. Any agreement between Amazon and a local dealer would need\nto be very specific.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

When the news broke that Staples had acquired DEX Imaging earlier this year, many observers speculated that the buyer was primarily intrigued by the dealer\u2019s service component, and the industry is waiting with baited breath to see how that will translate when fully enacted (note: DEX is still hiring all across the country). Certain partnerships can make for strange bedfellows, but it does make one wonder. Given that an online retailer like Amazon has perhaps the broadest reach of almost any business in the United States from a customer standpoint, is there any merit to the old clich\u00e9, \u201cIf you can\u2019t beat them, join them\u201d philosophy? Can money be made by partnering with Amazon, on a limited basis, to handle SOHO and even residential service work? Actually, yes. But probably not enough to pique your interest or make it worth your while. Check it out. Here\u2019s a link to sign up and add your service competencies to the litany of independent Amazon service contractors. From installing interactive whiteboards to printer\/computer setup and various IT services, you can add your name to the list of local providers for a given discipline(s). You can even denote commercial business only to avoid dealing with the general public.   Judging by the breakneck speed in which Amazon is growing all parts of its operations, it wouldn\u2019t be out of the realm of possibility for it to expand upon its business services, which could open the door to a more substantial partnership opportunity. In fact, Amazon or other online retailers could take the Staples route and make a national push with an acquisition of one or more companies across any number of businesses and verticals. In conjunction with the September state of the industry focus, we asked our panel of dealers to ponder the proposition of selling through Amazon or relying on the giant to provide certain ancillary products or services. Pros and Cons \u201cRelative to Amazon Business Services, I think there\u2019s going to be an opportunity. It\u2019s not even a question,\u201d noted Kevin DeYoung, president and CEO of Qualpath. \u201cOn the pro side, it provides business expansion. The scary cons of Amazon is what I\u2019ve witnessed relative to commodity pricing. Amazon wants to do business with organizations to have those organizations resell their stuff off of their platform. It\u2019s the wild, wild west on their platform. You could have commodity X, and you\u2019re going to have thousands of other people selling the same commodities. Amazon is going to take their cut off of the sale, and you\u2019re going to have tremendous margin erosion in whatever you do, whether it be a service or a commodity.\u201d Unfortunately, according to DeYoung, Amazon wants partners to provide 1,000 SKUs, and 99 percent of them wouldn\u2019t garner any action. On the plus side, those 10 SKUs that do generate business could generate a strong amount of business. Even there, a dealer might end up doing more at a much lower cost. \u201cThe question becomes, is that \u2018more\u2019 worth it?\u201d he posed. \u201cDoes that make economic sense for me as a dealer or me as a VAR\u2014that\u2019s really the question. That\u2019s always going to be the sticking point when you have a gorilla like (Amazon).\u201d AIS of Las Vegas, for one, is already doing business through Amazon. He sees the online giant as a possible partner for dealers who do not stray far beyond the traditional copier services and supplies, maintenance contracts and products. For dealer clients who have a need for VoIP or IT services, that partner could well be an Amazon. Control Your Destiny \u201cBut I think most dealers know that they want to be in control of their own destiny,\u201d said AIS Vice President of Sales Dave Clark said. \u201cThere\u2019s nothing wrong with a short-term partnership to help your business grow. But there\u2019s going to come a point where you scale so large that you\u2019re going to have to make a decision as to whether you\u2019re willing to take the leap of faith and go down this path to deliver these services to their client on their own.\u201d AIS does use Amazon in some one-off circumstances, but Clark can appreciate the danger in relying too much on the retailer as a partner. It comes down to stressing one\u2019s value proposition as a partner beyond the mere offering. \u201cAnybody can offer anything, but can you facilitate it, deliver it, measure it, and improve upon it on a continual basis? That\u2019s where most companies fall short,\u201d he said. \u201cAmazon helps people have a leg up. If you\u2019re a small dealer and you don\u2019t have excess cash and you\u2019re looking to grow into these types of things, it\u2019s an option. We use Amazon for cloud services occasionally, because sometimes the customer has requested it, or it\u2019s the right business decision in regards to backup, because the customer feels that they\u2019re better partnering with Amazon or Microsoft rather than a third-party data backup company. \u201cBut over time, there\u2019s a lot of great companies out there that can provide the same type of services, and that\u2019s all they do. And because it\u2019s all they do, it lessens the risk of them getting into our clients. Whereas we do use Amazon sometimes, I don\u2019t think that would be a standard for us because we realize that eventually, they\u2019re going to be a direct competitor of ours.\u201d For the time being, Donnellon McCarthy Enterprises (DME) hasn\u2019t seen a business model that makes sense for the dealer to engage with Amazon (or other retailers). Rich Brandenburg, senior vice president of sales for DME, notes that many dealers in his space are struggling with how to be profitable, which calls for an extra level of caution in deciding on different flavors of partnerships. \u201cThe traditional copier reps will go out and hunt everything they can, and they\u2019ll make it work,\u201d he said. \u201cIn the IT space, if you mess up the services side, you\u2019ll ruin everything else. So it\u2019s important to know, from a strategy […]<\/p>\n","protected":false},"author":166,"featured_media":36156,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[80,1650,82,1638],"tags":[3155,3221,3460,3521,697],"_links":{"self":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36155"}],"collection":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=36155"}],"version-history":[{"count":3,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36155\/revisions"}],"predecessor-version":[{"id":36173,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/36155\/revisions\/36173"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/36156"}],"wp:attachment":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=36155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=36155"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=36155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}