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Why Use a Business-to-Business Parts Distributor?
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Why Use a Business-to-Business Parts Distributor?
In this episode of the Technibble Computer Business Podcast (with transcript below), I’m going to talk about buying from proper business to business distributors. Rather than retail locations like Newegg, and Amazon.
Podcast: Play in new window | Download (Duration: 5:24 — 5.1MB)
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Discussion:
00:32 – Purchasing from major retailers
01:15 – Warranty problems and other issues
01:53 – Real business to business distributor
02:15 – Benefits of having proper distributors
04:04 – Does this make you less competitive?
Tweetables:
“Why Every Business Owner Needs A Proper Business-to-Business Parts Distributor” [Click To Tweet]
Transcription:
In this podcast, I’m going to talk about buying from proper business to business distributors. Rather than retail locations like Newegg, and Amazon.
This podcast is a bit more for the techs who are starting to get busy rather than the new startups. However, the new businesses can still get a lot out of this, to know what to look for in the future. When you do start your business you probably see an opportunity to buy hardware cheap at places like Amazon, and Newegg. Mark it up a bit, and you can still be cheaper than a lot of the big box retail stores like Best Buy in the U.S. or Curry’s in the U.K.
I personally did it this way for my first few years, and it was fine while I didn’t have too many clients. Then it changes. Problem with purchasing from Amazon, and Newegg is it doesn’t allow you to advance. Whether you purchased one part from them or thousand parts. You are still treated like a consumer buying their first part. If you are starting to move a fair bit of hardware. You are definitely going to want to get a real business to business distributor.
One of the issues I see a lot when you buy from consumers sources is warranty problems. I mean what happens if you buy a part in say January, have it sit on your shelf until you sell it in March, and then the part fails in February the following year? You will be caught out, because it’s after the warranty when you bought it, and still in the warranty period between you, and your customer.
Another issue we’d buy from consumer locations is, when you buy licenses it’s not always easy to track them. Also what happens if you get a bad license? It does happen occasionally. You have to go through the normal slow consumer channels. So, the solution to a lot of this is getting a real business to business distributor. Sometimes you are going to pay a little bit more, sometimes less, but whatever the case if you pay your dues now, and start purchasing through the proper channels, you will come out ahead. Eventually you will cross a threshold where you actually start getting 20% off, and then 30% off, and then even more.
Proper distributors isn’t just about the price of the parts either. They can give you access to training. They can send you swag like posters, and caps, and USB drives that sort of thing. Some will also give you sneak peeks at upcoming products, and will also give you demo units to play with. Some will give you portals to manage your licenses, so you know what you bought, when you bought it, and who it was from. Direct support is also a huge one.
Again to use the license example, they will help you out when you get a bad license. They will often help you out when you are in a tight spot and send you couriers when you need a part say in just a few hours rather than waiting the 1 or 2 or 3 days it could take to get it from Amazon or Newegg. Some will also offer you credit if you can’t afford parts to complete a large job right now. These representatives are here to solve your problems often before you even buy a product. Of course, they are upfront, and back-end rebates. Again that saves you a fair bit of money. That’s quite a few offers that go on like that. Some will also make it so the warranty starts when you sell the product. Not when you bought it from them. Avoiding the warranty problem that I mentioned before. Also if you stay in touch, and are friendly with the representative at the distributor. They can potentially send you work.
Eventually, as you raise your reputation with them some distributors will allow you to even choose what warehouse the part comes from. Reducing proceed cost and time. Some will even offer free shipping on large enough orders. Of course, some products are only available at through proper distributors, and not at consumer levels.
You may say this makes you a little bit less competitive. That you are paying the higher prices to build a reputation with a distributor, and of course your prices are going to go up to your clients. In turn, making you less desirable. You will find that this is not the case. It doesn’t really matter what you charge if you are installing the part for the customer. To use an example, let’s say you have a plumbing issue. The plumber comes in replaces some copper pipes and hands you an itemized bill showing that he charged $50.00 for the 2ft of copper pipe. Then you go down to the hardware store and find that you can get 2ft copper pipe for $5.00. Are you going to call the plumber, and yell at him, because he is charging you $50.00 for the supplies? No, you are just happy that the water isn’t leaking into your wall any more.
You can charge much more than you think for parts if you are installing them. Sure, some little odds and ends are fine going through Amazon, and Newegg, but for higher price parts that you are selling a lot of, go through a distributor. Pay a little, extra build the reputation, and take your business to the next level.
This is Bryce Whitty with the Technibble Computer Business Podcast.