The market for IT VAR is constantly changing and expanding, with no sign of slowing down anytime soon.
Today, IT VARs are selling online and they require more than just a plain eCommerce platform.
They need specialized IT VAR eCommerce software as it provides value-added resellers (VARs) everything needed to overcome the challenges of managing a catalog, dealing with volatility in prices, and high inventory management costs, among others.
In this blog, we understand the challenges of IT VAR business and how an appropriate platform for IT & Office Supplies VARs help.
- The Challenges
- How the right eCommerce platform helps IT VARs overcome the challenges?
- Better reach for enhanced profitability
- Better Catalog Representation
- Product Comparison
- Upsell and cross-sell
- Inventory management
- Multiple distributor connections
- Real-time pricing
- Cloud-based platform – easy to access and cost-effective
- Integration-friendly- CRM, sales quoting software, ERP solutions, PIM, etc. to minimize long-term sales operations costs.
- Multiple payment options
- Auto-calculation of tax and freight charges
The Huge Size of the Catalog
IT VAR catalogs are huge and incur dramatic management. Although it might seem relatively straightforward, the process of keeping them clean and updated is quite challenging. Manual updations and uploads using a spreadsheet or inefficient software, make it difficult for VARs to deliver their relevant product information to their customers. Moreover, products come in different variations. The resellers have to explain the difference between each variation, which can be an uphill task.
The prices of IT products are highly volatile. They keep on changing depending on the changes in the marketplace. For an IT reseller, keeping track of the prices of each product is quite challenging. These dynamic price changes also make it arduous to define the business’s profitability.
In the IT industry, the rate of technological change is exponentially high. New products and technologies are launched every second, making the older versions obsolete. As a result, the sales of these items are discontinued, making the VAR businesses incur tremendous losses.
Thin Profit Margins
Another challenge faced by resellers is the thin profit margins. Usually, resellers purchase products from manufacturers, dealers, or distributors. Depending on those products, they get a margin of only 1 to 5 percent, which is not high. Therefore, they need to increase their volume.
High Inventory Management Cost
The expense of managing inventory and warehouse is relatively high. Many times, resellers cannot predict when and what their customers want. So, they choose to stock the products in the warehouse which incurs costs.
Sales Operation Cost
A misconception about the reseller business model is that it involves only buying and selling products. It also includes managing the sales team and operations too. Since the products are tech-specific, the sales reps need to be trained and updated about the specs, which increases sales operation costs.
The world of eCommerce is expanding rapidly, with resellers increasing their expectations continuously. Competitors are also seizing the opportunity to grow their global online businesses, cutting traditional resellers’ profits. They have significant funds that help them scale up quickly. Matching up with these giant aggregators as per their financial limitations is difficult for the new resellers.
How the right eCommerce platform helps IT VARs overcome the challenges?
With an appropriate eCommerce platform and the right integrations like ERP implementation, IT VARs can overcome these challenges. Following are the points that allow them to do so:
Better reach for enhanced profitability
An eCommerce business increases the visibility of your products to a wide range of audiences in different time zones and beyond geographical boundaries. Better visibility brings more sales opportunities and profitability.
Better Catalog Representation
An eCommerce platform provides a better representation of the catalog. Unlike printed catalogs that only include basic details and images, digital catalogs have a better impact with product descriptions, pictures, and videos.
This is one of the B2B eCommerce features for IT resellers that helps the customer get a better idea of the product as the video will show the ways to use particular products and their features. This way, the chances of customers buying the product increase dramatically.
If you are starting with offering limited products, more products can be added to a digital catalog as you scale up.
Since the huge catalog is now linked with the database of the reseller eCommerce platform, managing and representing it becomes relatively effortless.
Before making a purchasing decision, customers prefer researching a particular product. While analyzing, they compare the products. With appropriate IT VAR eCommerce software, the process of comparing and shortlisting different products becomes effortless.
They do not have to keep multiple brochures and catalogs in front of them to differentiate the products. This way, they can make quick and well-informed decisions.
Upsell and cross-sell
In the IT VAR business, cross-selling and up-selling increase customer lifetime value (CLV). The right eCommerce platform helps you highlight the right products at the right time in front of your customers. For example, you can upsell a higher-end IT product when your customer is going for a basic version and you can cross-sell toner cartridges with a printer.
With the help of an appropriate platform for IT & office supplies, VARs can stock or maintain only limited products for showcasing purposes. In contrast, the remaining products are displayed and explained on the website. If only a few stocks are left, or the products are out of stock, it will automatically be reflected on the website. These updates are automated by Product Inventory Management (PIM) software, which restricts manual working. In-built or integrated ERP solutions too help keep a track of the inventory.
Multiple distributor connections
An eCommerce platform with multiple distributor connections offers better price comparisons, discounts, and a variety of products. Resellers can take orders and get them fulfilled through their partner distributor.
As discussed earlier, in the case of IT products, the pricing is volatile. The frequent change in pricing must be updated in real-time in the catalog for accurate quotation.
An eCommerce platform offering access to real-time pricing controls these dynamics.
Cloud-based platform – easy to access and cost-effective
With a cloud-based eCommerce platform, you create a robust online business that provides you accessibility while being cost-effective. It reduces the need for a massive on-site IT staff.
Moreover, it is highly scalable, enabling businesses of all sizes to afford a reliable service. In a Cloud-based platform, they only have to pay for what they use, which minimizes waste. The cloud-based eCommerce platform is accessible from any device, anytime.
Integration-friendly- CRM, sales quoting software, ERP solutions, PIM, etc. to minimize long-term sales operations costs.
The eCommerce platform that provides seamless integration of tools like CRM, ERP VARs software, PIM, etc. helps you automate manual processes, eliminate data redundancy and human involvement, provide accurate pricing, increase internal productivity, and much more. The combinations of these solutions like CRM and ERP software cater to multiple requirements of an online business.
The right eCommerce platform directs your order to the distributor who dropships the products directly to the customer. Dropshipping is the business process where the order is directly shipped from the manufacturer/distributor without holding any stock of your own.
It is a low-risk business model which is very helpful for IT VARs. Now they do not need to worry about maintaining stocks of the items that may go obsolete after the new technology is launched. It saves you from paying high inventory costs.
Multiple payment options
The exponential growth of online shopping has made customers look for multiple payment options. They want the payment system to be fast, flexible, and convenient. The VAR ERP software provides various payment options to keep customers happy and loyal.
Multiple payment options help the resellers to expand the reach of products to new markets. The ease and choice of payment give a competitive edge to the IT VARs.
Auto-calculation of tax and freight charges
An appropriate eCommerce platform comes with an in-built tax calculator that includes taxes in the quote. These tax calculators also manually add taxes for customers that override automated calculations.
VARStreet, one of the best eCommerce platforms for IT VARs, helps them design their B2B eCommerce store effortlessly. Having responsive designs, rich functionalities, tax and freight integration, and popular gateways, resellers tend to make their eCommerce journey effortless and sustainable.