These are interesting times for IT resellers and distributors in Asia Pacific. Regional growth is expected to decline over the coming years thanks to weakening external demand and the continued uncertainty and impact on investment caused by the US-China trade war. In addition, economic uncertainty is causing businesses and consumers to tighten spending, especially in China, even as the Windows 10 refresh cycle is peaking.
Against this backdrop, it’s more important than ever that regional channel firms ensure they make the right business decisions. But using vendor data as their point of reference is, by definition, limited and sometimes confusing, and so this is where third-party insight is invaluable to help steer a successful course.
Data means insight
In today’s tough economic environment, customers will always gravitate towards the brands they know and trust and this is a good starting point for resellers/distributors. But while brand equity is important, it is important to make sure not to neglect the smaller vendors that may offer potentially lucrative opportunities. This is where monitoring key indicators like growth and reseller upfront margin (the difference between reseller buying and selling price) are important.
Vendor channel programs can be complicated. Resellers are often understandably confused by the small print, leaving them uncertain about key financial details such as how and when they get their rebate, when they qualify for accelerator programmes, and which products they should be promoting most. This often forces channel firms to push products where they can get money upfront, which is why reseller upfront margins are such an important indicator to monitor.
That’s not all: channel firms need to identify not only the key vendors they want to partner with, but also which product subcategories to invest in. Monitoring industry trends is an important way to uncover what’s hot and what’s not.
So where should they get this market intelligence? Not uniquely from the vendors themselves.
Planning with confidence
The need for resellers to educate themselves about the market and specific products is illustrated by a closer look at the gaming monitor market.
The truth is that there’s a huge gap between marketing and reality in this subcategory. In reality, anything other than a 144Hz monitor shouldn’t really be branded as gaming-ready, because the refresh rates are too slow for hardcore users. However, vendors are using the description on an increasingly broad range of monitors, with refresh rates as slow as 60Hz.
There are two takeaways from this. First, channel resellers and distributors must be careful with their product positioning when selling ‘gaming’ monitors. And second, they should look to independent sources of market insight like CONTEXT when putting together their business strategies. Don’t believe the marketing hype, believe the data — from reputable third-party sources.
We have over three decades’ experience tracking sales and price data for the IT channel, collecting it from all points in the ecosystem: vendors, distributors, etailers, and corporate and SME resellers. With the right data at their fingertips APAC channel firms can plan with confidence for the year ahead.
© CONTEXT 2020