Where have all the B2B software resellers gone?

Annette Dow sees a lack of response from software players and wonders what is going wrong

Anyone involved in the B2B software distribution and resale chain knows only too well that the earth has moved significantly in the past 10 years.

More vendors and distributors have reduced margins, enforced higher minimum sales targets, or in the case of vendors, have simply set up their own direct sales teams, often having learned the ropes from their channel partners.

This has necessitated some nimble footwork on the part of resellers and consultants when it comes to restructuring, refocusing, and being more selective in the products in which they invest time and resources.

There is no question that times are tough, but the channel can still offer a great deal. Resellers were central to the success of Ghost, now owned by Symantec.

So here is what I don't undersrand. In 2012 we went to some of our larger US resellers, offering to provide product training and incentives for their sales teams. They said they wou'd love to do it – provided we paid for the training time and also for "being allowed to" offer the incentive programmes.

Excuse us for trying to help you grow your business.

What has been even more fascinating to me in the past year is the lack of willingness from the channel to even look at products to add to their portfolio. Are we asking too much of channel partners?

As always, there are many companies that simply process orders, doing nothing to promote the product unless you pay them huge amounts of money. We accept that but do sign them as we want users to be able to purchase through their normal channels.

For the small to medium-sized reseller or consultancy that is willing to do some (minimal) promotion to their customer base, we offer decent margins and benefits programmes.

For the sake of putting the product on their website, adding a link to the download page, doing at least two annual marketing campaigns targeting their database, getting one person to review the product training materials (maybe a three-hour commitment), and being willing to work the warm leads we send them, they can earn margins of up to 35 per cent, which seems pretty good nowadays.

And who walks away from warm leads? Most resellers, it would seem. Of our current channel, 60 per cent appear to have no interest in working any leads from their territory. We understand they might have limited resources, but these are warm leads.

So what are we doing wrong as distributors?

I can anticipate some of your thoughts. Is the market too small? What's wrong with the product? Are you asking too much commitment from a channel partner? All valid questions.

Our software targets Windows network administrators across every industry. Usage is growing particularly rapidly in datacentres – linked with the growth of the cloud. The product has been around for a while, is stable, and regularly updated. Users love the support they receive, and acknowledge it saves them significant time and money.

So are we asking for too much commitment? Perhaps we are, in the current climate, but we also offer a less dedicated route. You can become an associate and simply refer a lead to us for 20 per cent of the sale price. Even this is getting a lukewarm response for resellers.

So it comes back to two key questions. Where have all the B2B software resellers gone? And is it us, as distributors, or the resellers who have unrealistic expectations? I'd welcome your views.

Annette Dow is director of Binary Resource