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IT Reseller - Price vs Value

Last response: in Business Computing
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March 22, 2012 8:34:11 PM

Hey gang,

I'm a senior account executive at an IT reseller in NJ. I've been contemplating the dilemma of price vs value. I typically deal with CEO/CTO/CIO, through the IT department and down through purchasing. Most of business has been through referrals because I feel like I do a good job of infusing value. I know compared to my competitors; Insight, SHI, CDW, PCMall, etc I know I'm aggressive. However, it seems less and less that my clients are interested in value but pricing.

So, as IT professionals, what do you guys think:

*Is price more important than value? Is that due to the economical situation?
*If it's value, what qualities do you look for?

I look forward to your responses :) 

More about : reseller price

March 22, 2012 10:35:32 PM

Hi :) 

I am in the UK and I suspect you are in the US...but...

I own computer companies in the UK and have found that lately (during this financial recession) that customers will ALWAYS go for price rather than quality (unfortunately)

Luckily my shops and laptop repair company make a lot of money on repairs....so we guarantee all the machines we sell ourselves....

Thats really the ONLY selling point that customers seem to care about, the fact WE will fix them and they dont have to send them off to some nameless company...

As a buyer (for parts mainly) we buy on price AND quality...

What I mean by that is price is very important to me..BUT as we are guaranteeing everything we sell, there are certain makes we wont sell (because they are rubbish basically)...so we will NOT buy as an example...Maxtor hds or Asrock Mobos...we have had too many returns on each make... so we WOULD pay more for a better make of hd or mobo...but only in certain circumstances...

Hope this helps...

All the best Brett :) 
March 23, 2012 12:25:14 PM

Hi Brett,

I think some cultures just more prone to price shopping than others but western culture typically leans towards value but as you said, it seems to be a price issue today.

When I run into an issue where a client is looking for lower end parts, I feel as though it's my duty to kindly explain the higher risks in such substandard parts.

In my position, I also do the buying for the hardware/software that I'm sourcing. I have one particular distributor that I'm more personal with but if they're that far off the mark in terms of pricing, I'll have to go elsewhere.

Thanks for your feedback.

Cheers!
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March 23, 2012 11:21:36 PM

I too am the owner of a computer repair business. One of the big things that sets me apart from a lot of other technology businesses is I operate in a very rural area. Here, the most important thing is service.

The majority of customers that I have received over the last three years have been those who were burned so badly by other tech companies in our area that they are desperately searching for something, anything, that offers true quality. That is where we have our reputation. The best thing about it is we also offer the best price undoubtedly, and while that keeps people even happier, it is our focus on offering higher quality than competitors and higher quality service than many of the broken promises our customers have been given by others.

We sell almost no pre-built systems except for laptops and some servers. Mainly this is because I know I can get superior performance and quality by hand picking and assembling our systems to order which means I have more faith in it lasting. Plus, I can fix the system myself instead of having to call up some customer service representative in Bangladesh and packing up a customer's computer to ship off for a week or two for repairs. Around here, there is no such thing as Dell or HP next business day service, even if you pay for it!

There are two big things that I have customers tell me time and again that has made the biggest deal for them. First, I have gone the extra step to communicate with them. This means that I have gone through and evaluated what they are doing with their systems and also have shown my direct interest in the progress of their business. I have explained out at least a couple different options for them to consider and specifically have compared those options (such as custom computer systems) to other common options they may get elsewhere (such as ordering pre-built from Dell or HP.)

The second thing is that we offer direct service. If a customer has a problem, they can call us and talk with us directly. They can discuss with us their business needs, ask questions, and generally feel that they have someone with their best interest in mind. We don't just make them pack up their computer if it dies and ship it to us for a week, lose all of their data without a care in the world, and send it all back still not working properly. This is the kind of service a lot of our customers have received from other companies and that's why we now have their business.
March 23, 2012 11:45:38 PM

Hi :) 

A lot of good stuff there, which I totally agree with, your business sound similar to mine, with the personal service etc...

I am REALLY honest with my customers (particularly business ones) ...I even say "we ARE the most expensive company locally but we give the best SERVICE bar none"

If you are honest and as you do (and us) guarantee the machines yourself and fix them fast (1 to 2 days normally) business customers do not mind paying...

Retail customers are a totally different kettle of fish though... the number of times in my shops we say things like ...a hard drive is "X" pounds, then the customer says ...yes but I can buy that off the net for ten pounds cheaper....we then say...well off you go then.....they then say... well I need it today....wont you match the net price...and we say no of course as buildings/rates/taxes/wages all cost money.

They usually buy but seem aggreived at the fact we wont price match lol....but the day I start selling stock at a loss is the day I will give up....

All the best Brett :) 
March 23, 2012 11:48:21 PM

Hi :) 

On another note....I hope more Computer business owners / Suppliers will chime in on this thread.... interesting to get different viewpoints....and makes a nice change from "where do I get free download of *****" lol..

All the best Brett :) 
March 24, 2012 12:48:34 AM

Indeed it is very good to hear from other computer business owners and see that I am not the only one who addresses these same issues and thinks the same way about customer service.

There is a quote from Benjamin Franklin that I just did a large printing of in my office that states, "The bitterness of poor quality is remembered long after the sweetness of low price has faded from memory."

Thank you for chiming in on this as well Brett, (oddly enough my name is also Brett lol) and it is quite refreshing to hear from other business owners that are willing to be straight and honest with their customers and put quality service first. That is something sorely lacking in some other computer business around here which is why I started my own company instead of joining theirs.
March 24, 2012 1:08:01 AM

choucove said:
Indeed it is very good to hear from other computer business owners and see that I am not the only one who addresses these same issues and thinks the same way about customer service.

There is a quote from Benjamin Franklin that I just did a large printing of in my office that states, "The bitterness of poor quality is remembered long after the sweetness of low price has faded from memory."

Thank you for chiming in on this as well Brett, (oddly enough my name is also Brett lol) and it is quite refreshing to hear from other business owners that are willing to be straight and honest with their customers and put quality service first. That is something sorely lacking in some other computer business around here which is why I started my own company instead of joining theirs.


Hi Brett :) 

The mistake a LOT of Computer businesses make is undervalueing themselves....

They go broke a LOT...lol

I didnt get to run a Porsche by being cheap :) 

The main problem these days is computer companies who try to compete on PRICE against the big supermarkets and the net....

It just CANNOT be done...not if you are a small business...and its financial suicide if you try...

You MUST concentrate on what the net/supermarkets CANNOT do...like repairs and custom building and SERVICE....then you make some profit :) 

All the best Brett :) 
March 24, 2012 1:19:26 AM

Based on your comparable competition I'll assume you jsut re-sell OEM products and parts, no custom systems as others have described. I'll also assume there are no repairs involved since the items would be covered by the OEM warranty.

Part of the problem is Value will vary by the enterprise and how it is structured. If the eneterprise has a constrained IT staff short on time they may value small time saving items, on the other hand an enterprise with plenty of IT staff may see little value in these. Additionally depending on the actual computing environment at the firm some items may have more or less value. As an example lets assume you resell hardware, some enterprises will see value in:
  • Pre-installed hardware before it arrives to the customer site (usually this can mean drives,ram, switch cards, SSD's, etc). As is at least some large OEM products (HP servers) are shipped with some assembly required the VAR does not do it (and the customer doesn't pay the setup/installation fee).
  • Pre-installing a standard image on PC's prior to shipment
  • Assistance in designing more complex solutions (storage solutions meeting a set of requirements)
  • Offer items that seem to be forget based on purchase history (i.e. OEM onsite laptop support)
  • Dedicated rep/team/e-mail for quotes/status (consistently reaching the same people is very helpful)

    On the otherhand some customers will prefer to do these items themselves. I see value in the first and am torn on the second myself, the third is valuable for complex enough issues. A smaller enterprise with limited IT expertise may see Value in assistance selecting the right product for a user (say selecting a laptop based on the software they will run or other requirements).

    In some areas there is little question the the value of a single source. As an example our software VAR maintains a database of all of our purchases and will output reports (based on various requirements) to help with software licensing inquiries. This has a large value to us, and although there are many times we could source the software from the manufacturer or another source cheaper we choose to use the VAR as the complexity of potentially tracking many purchases via any number of sources. This is more true of software due to the difficulty in maintaining compliance if additional tools are not available to monitor installed software (without over-purchasing licenses of course).

    For some companies right now there is nothing worth more than absolute cost. It may be that they have minimized expenditures to maximize cash flow and would rather pay an expense they would already (someone's salary) than spend extra money. In that case there is no proposition a VAR can really add.
    !