The distribution channel should research vehicle tracking and mobile data providers carefully before signing on the dotted line.
The volatile economic landscape has meant that dealers venturing into vehicle tracking need to be aware of the pitfalls. Enviable reputations and strong customer relationships that have taken years to build can be destroyed.
Do your homework and ensure the contract for liability lies, not with yourself, but with the provider.
The problem with the rapid growth of any industry sector, or technology, is that it attracts unscrupulous start-ups looking to make quick, easy money at others’ expense.
If a provider goes out of business, it is the dealer that will be forced to shoulder the financial burden of reimbursement.
Third-party vehicle tracking providers are offering white-label systems. Confidence in the resilience and reliability of these systems can never be assured. Providers that badge the technology up as theirs own neither the intellectual property nor provide the technical support to customers.
Resellers will not want to hold the contingent liability if technical problems occur.
With the best of business intentions, insolvency will always remain a very real possibility. Many new businesses are said to fail within their first year, or within three years.
Failure rates within the telematics sector, particularly in the wake of the recession, are likely to be even higher.
Ensure you are selecting a provider that takes responsibility for every aspect of a system’s operation and that you are not involved in the liability chain.
When a customer has a problem with a mobile phone, the dealer simply goes back to the network and has it repaired or replaced under warranty. So the issue of contingent liability is not something mobile comms dealers are used to considering.
However, the vehicle tracking industry has proved more volatile and has a tendency to operate in a more arbitrary fashion.
More reputable system providers will hold the contract liability but all too frequently, across the market as a whole, this is not the case. There can be benefits from operating in the telematics market but these will only be realised by those that do their homework.
Problems with clawback claims can be avoided if the right tracking supplier is selected. With cashflow being king this can be an advantage, as can an offer from some providers that negates the need to buy or hold stock.
Trading history, reputation and the nature of offering should all be investigated.
In addition, dealers should be shrewd when analysing the pricing structures for systems they consider selling. Low headline daily price rates will ultimately disappoint if they then discover that the system offered is a stripped-down version of what they require or had been expecting.
To achieve lower prices, functionality is often being sacrificed. Crucial business benefits should not be surrendered. Sacrificing the frequency of updates, for example, in return for a lower price is less likely to compromise customer expectations than the sacrificing of important driver reports.
The caveat venditor – let the seller beware – message is simple. It can be relatively straightforward to set up a tracking system, however unreliable that system may prove to be. But do not make this your problem. Protect your reputation and client relations; carry out your due diligence and choose wisely.
Steve Blackburn is Europe vice president at Navman Wireless
Automation firms UiPath and Automation Anywhere close out their funding rounds with $265m and $300m respectively
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View photos of all the winners from the 2018 Channel Awards
After a glittering awards evening in Battersea celebrating 25 years of the Awards, we are pleased to share the list of winners and judges' commended winners