Quoting and Opportunity Management for Value-Added Resellers
A value-added reseller (VAR) is a business that purchases an existing product manufactured by another company, combines it with additional services, products, and features, then sells them together at a profit as an integrated solution.
Value-added reselling is not new. VARs have been around in the car industry, for example, for more than a century in the form of dealers purchasing cars from manufacturers, then reselling them packaged with warranties and service plans.
Today, value-added reselling is particularly prominent in the IT hardware and software industries, where demand is surging and the forecasted CAGR between 2021-2026 is 10.36%.
While the opportunity is large, VARs face a variety of challenges that can make their sales process daunting and leave them open to risks of inaccurate data (and unhappy customers as a result).
Leveraging software and AI-powered solutions can help VARs maintain accurate data, streamline processes, and optimize communication across teams.
VARs often represent dozens to hundreds of vendors, and keeping up with a fast-growing market while retaining accurate information on price point and product details (which changes often) can be daunting.
Not doing so, though, presents the risk of products being sold at the wrong price and frustration on the part of both buyer and seller as the process stalls waiting for accurate information.
To better illustrate the scope of the challenge: Ingram Micro, a large U.S. IT distributor, offers 1.6 million+ SKUs from 650+ brands across 25+ categories and 500+ subcategories. Now multiply that by dozens or hundreds of products that one VAR is tracking.
Doing it manually just isn’t possible.
Configure, price, quote (CPQ) software generates quotes using real-time updated, integrated data that ensures pricing accuracy.
According to Salesforce, CPQ software makes quote generation 10x faster, creates a 95% reduction in approval time, and cuts the time between quote to cash fully in half. These numbers have huge implications for VAR productivity and ROI.
By implementing CPQ solutions, VARs can manage large and changing lists of products and prices, ensuring buyers receive the right information while giving VARs clear visibility into margins at the time of quote.
VARs also deal often with product renewals and maintenance costs, which present a substantial revenue opportunity but can be very complex. One renewal with a large corporation or government entity, for example, can involve multiple vendors, hundreds or thousands of products, varying margins and discount rules unique to each vendor or product.
Utilizing AI-powered solutions to merge, analyze, and update renewal-related pricing and documents can significantly reduce the manual effort and human capital required to maximize renewal revenue opportunities.
Because VARs operate on thin margins (most of the time below 10%), issues like pricing inaccuracies, excessive discounts, and shipping costs can quickly make a dent in (or nearly eliminate) profits.
Automation is a key part of effectively managing margins.
CPQ software can help with setting pricing and discounting rules as well as integrating predicted shipping costs into a transportation management system (TMS) so that VAR reps can be aware of those costs and work them into a quote before sending it to the customer.
Streamlining Deal Registrations
Deal registrations occur when a VAR informs a seller about a sales lead, gaining preference for the sale by doing so.
Deal registrations can be cumbersome, especially since most vendors require deal registrations to be entered via a portan. This means VARs have to keep track of countless logins and process variants across vendors.
Rainmaker is currently developing a next-generation approach to addressing this challenge specifically. The solution will integrate with Salesforce so VAR reps can quickly translate details to any vendor working through a Salesforce-enabled portal (up to 60-70% for some VARs).
This will not only greatly reduce the manual effort required by VARs to get deals entered but will offer better insight into how much revenue is at risk of being registered by another partner.
Sharing Information Across Teams
Sales teams are made up of dozens, hundreds, or even thousands of representatives who all need access to updated pricing every time they give a quote. Without automation, this is a sales-enablement nightmare. While most large teams have sales support staff to assist them, price checks still take time and can leave customers waiting.
It’s no surprise, then, that sales reps spend 75% of their time on administrative tasks instead of selling.
With CPQ process automation, VARs don’t have to lean on sales support to get them the information they need and, on top of being able to access it themselves, will have information that is updated real-time and doesn’t put them at risk of an inaccurate sale.
Finding Your Solution
Finding and implementing the solution best suited for your VAR team and vendors can be a complicated process. Rainmaker helps companies navigate complex challenges to find solutions that uniquely fit their needs.
Get in touch with us today to learn more!