Did Covid shift the balance of power in the imaging and technology channel?
It sure did! Here’s why it matters for your business.
The power in all industries changes among its industry players over time. Technology innovations (e-commerce, new build compatible supplies) and external forces (Covid, supply chain disruptions, etc.) give greater authority to the various players in our channel.
What and who exactly are the players?
Self explanatory. HP, Xerox, Canon, Kyocera, Lexmark. They make the products we know and love. They are the foundation of the industry.
You! Amazon, CDW, Staples, The Channel. In the B2B technology market, who advises customers on product choices? Who manages the relationship, and extends ongoing credit?
Amazon, Ingram Micro, Tech Data/Synnex, Distribution Management, Clover Imaging Group. Remember when dealers bought and inventoried products themselves? Some still do, but this industry relies on world-class logistics.
ECi, Great America, Amazon, U.S. Bancorp, MPSToolbox. The software that runs your business processes. Providing credit, and managing contracts.
Amazon, Clover Imaging Group, NineStar, Print-Rite. Having choices on supply products helps keep OEMs in line. They help resellers maintain profits.
What do they buy? How do they buy? Where do they buy? Are they able to switch easily from one reseller or manufacturer to another?
In the last two years, Covid has caused unprecedented supply chain issues. In case we didn’t know how dependent we were on offshore manufacturing, we do now. Assuming manufacturers can even get the materials to make products, securing shipping containers from overseas and even drivers in North America is a challenge.
Notice anything peculiar about the list? Amazon appeared in every category except manufacturer. Even if they are not a manufacturer, most manufacturers have a store on Amazon. For that privilege, manufacturers pay 15-20% of the selling price to Amazon.
Product shortages are not unique to the technology industry. Customers see them every day, but there is a comfort knowing that if they go to Amazon.com and search for a product, like a printer or a laptop, or a TV, that if they pay for it, delivery is more or less guaranteed.
Resellers often mistake the motivations of customers that shop on Amazon, or, that Amazon customers are consumers and not businesses.
As a business, I can assure you that I buy from Amazon. Do your employees buy from Amazon for your business?
What am I driving at?
Infrastructure providers have changed the expectations of customers.
Technology now enables customers to find products, prices, research alternatives and buy, in one transaction.
- That process has disintermediated (i.e. rendered useless) the sales process of companies that wish to keep these transactions separate.
- OEMs will soon move away from channel sales processes, toward a direct online model.
- Prediction: the OEM product brand will temporarily take a back seat to product availability. “I don’t care what brand it is, I just need a printer!”
- The brand of the sales source (Amazon, Your Brand) will become more important than the product brand itself, in the buying process. (OEMs selling direct? Win 4 and win 5).
- OEMs will stop developing products that require complex sales models to ones that can fit into one transaction.
Amazon is not the cheapest. That’s not why they are winning. Amazon is winning because your customers are adopting the new one transaction sales process. You need to move your transactions online. Let MPSToolbox show you how.