6. Base Commissions on Collections
Someone (probably a retired CFO) once said, “A sale is not a sale until the invoice is collected.” If this is true, why pay a full sales commission when the product ships? Consider paying partial commission at the time of shipment with the balance payable at the time of collection. Or adjust the commissions monthly based on receivables that age out past a predetermined time frame (i.e., 60 days). This will encourage your sales staff to provide better customer service and follow through after the sale. This, in turn, will speed up your collections and cause cus-tomers to be happier with your performance.
5. Sell Peripherals
The profit margin on desktop computers is small. Make sure that your sales people add peripherals such as scanners, internet connectivity, extra memory, multimedia kits, modems, docking stations, network interfaces, communication linkages, electronic personal orga-nizers, etc. This is your opportunity to increase margins.
4. Maximize Soft Dollars
Many manufacturers offer a variety of ways for you to redeem soft dollars. If you have the option, do not use your soft dollars for vacation travel or gifts. Attempt to work with your vendor representative to utilize soft dollars on avenues that will increase your sales, such as advertising, vendor-focused employees, special financing terms, etc.
3. Utilize Financing Subsidies
Most of the major CPU manufactures are still offering 30-day interest free financing subsidies through finance companies. Master resellers and distributors should be able to provide you with more attractive pricing when you purchase through a finance company because the manufacturer pays for carrying the receivables rather than your supplier. Make sure you negotiate your best deal when purchasing your CPU’s by leveraging in the manufacturer subsidies and getting your best price.
2. Sell Services
There are excellent profits to be earned on the proper selling of services. The most popular are installation, training, support, technical services, configuration, extended warranties and repairs. Many customers are asking for on-site personnel to administer the services. This in turn gives the reseller the opportunity to learn more about the customer and their business needs. Attempt to bundle these services whenever making a new hardware sale.
1. Focus On Emerging Technology
Attempt to get in front of the emerging technologies. Those who were in the front end of networking are now in a much bet-ter position to serve their customers as networking continues to explode. Future technologies can be found in internet based business opportunities, disaster planning, document imaging, voice/data technology, EDI, etc. Be pre-pared to exploit the appropriate opportunities.
By focusing on any of the items on this Top 10 list, a savvy reseller should be able to increase his or her bottom line. Trying to accomplish them by you can be frustrating. Instead, challenge different members of your staff with one or two of the items on this list. Have them measure their results and present their accomplishments to you monthly or quar-terly. Set goals and review accomplishments against those goals. And finally do not forget to celebrate your successes with those who helped you accomplish them.
Jeffrey Masich is Vice President of MicroAge Channel Finance.
Tags: collections, services, technologies