In last week’s blog I covered the good, the bad and the ugly about HP’s new partner program, Amplify. This week I will dive into the overall direction of the program, which is shocking because of what it largely omitted, as well as the amount of homework they have given dealers.
The thing that is being amplified is the digital presence HP wants its partners to have.
Why the big hurry?
HP is getting hammered by Amazon. A quick look up for a product like a 226X shows dozens of products at a fraction of the OEM cost. Buried within the search is the actual OEM cartridge, MAYBE! It's hard to tell because some compatibles use the OEM image. But one vendor listed has over 650 REVIEWS meaning it has made 1000s of unit sales.
Searches on Google are better for HP, but there is a reason for this.
Google makes its revenue by people clicking on a link whereas Amazon only makes money when people buy.
This is not a small point!
- Consider that at best 5% of users that click on a Google search result link actually buy (this is called a conversion rate), and 5% is very high.
- You need to average 20 clicks to get one sale.
- You will likely pay approximately $3.00 per click.
- So each sale for this cartridge will cost $150.00 in ad spend.
You read that right:
In this example you will spend $150.00 in marketing to sell a $150.00 cartridge. Assuming your gross margin is 20%, and oh, yeah, add to that shipping, credit card fees and admin costs. This is a really tough market to crack. If you want to go out of business, hop on to the Google Shopping carousel.
Why is this important when it comes to Amplify?
Here’s what is really bothering HP: they are upset that THEIR CHANNEL (read: you) is getting creamed by online merchants that have no loyalty to HP. HP wants partners not only to have an e-commerce site, they are going to REQUIRE that you are also good at it. What does that mean? There is a reference to a 2021 requirement that ensures a certain percentage of sales are done via a mouse click.
The issue is that as more customers demand an online experience, and they can’t get it through their traditional business partners, customers take matters into their own hands and buy online from those that can help them. Back to Amazon. Most buyers know that if they are unsatisfied with a purchase, Amazon will stand behind it, when buying from a non-Amazon store, reputation matters. WHICH IS WHY...they need YOU, the reputable local provider, to pull up your socks and figure this stuff out—FAST!. They are tired of you letting their (and your) customers slip away to buy compatibles online from another source.
So, HP gets that this is a two step process—Step 1: Get an E-commerce store. Step 2: Get good at it.
There are a few infrastructure vendors that can get you through Step 1. But that will do nothing toward Step 2. You need help and experience to get good at E-commerce. That’s where MPSToolbox comes in. If you build it, they won’t come. You need to drive demand. We can help.