Supplies & accessories

Office World News, Nov 2001 by White, Monte

MARKET UPDATE

A Satisfying Meal for Profit-Hungry Resellers

No doubt about it, the economic downturn is tough on solution providers. According to VARBusiness magazine, only a handful of tech companies managed to meet expectations for the first quarter ot 2001. What's needed is a business strategy built around profitability -- focusing on product categories that offer better-than-average profit margins.

One category savvy resellers are beginning to embrace is supplies and accessories, a recurring revenue stream with gross profits in the range of 15% to 25%. Not bad for a business that's easy to get started, with the help of your major distribution partner.

Profit margins are just one reason resellers should consider selling supplies and accessories. Though higher-revenue, technology-based solutions will always be a resellers bread and butter, supplies and accessories can bring in significant incremental revenue from existing customers -- and from new customers within existing customers, since often the buyers are administrators and office managers, as well as IT executives. And being less subject to economic and seasonal fluctuations, the revenue is something you can count on.

Supplies and accessories also offer a reason to touch customers more frequently and deepen the relationship. The converse is also true: resellers not into computer supplies and accessories allow competitors to gain access to their customers -- a real risk, given many companies' desire to consolidate into fewer suppliers.

A NEW WAVE

The computer supplies and accessories market encompasses a huge variety of products from paper clips and staplers to computer tracking devices and printer cartridges. There are, however, new categories of supplies that have arisen and are taking their place among the most wanted and most profitable products for dealers to offer.

STORAGE STORIES

Managing and protecting missioncritical data is more important now than ever. Storage-intensive requirements such as data warehousing, data mining, and Internet browsing are increasingly growing, and generating the need for extended storage solutions. Capacity, performance, and long-term reliability are key elements to consider when choosing a storage format.

Increased dependence on electronic communication has streamlined business management while simultaneously allowing for possible data loss, leaving a business at a competitive disadvantage. The potential causes for lost data can be due to a computer virus, equipment failure, reformatting, human error, and many other unexpected situations. There are a broad range of solutions available to ensure that a company's documents-its most important asset be securely stored.

CD-R's have become extremely popular, as recordable drives become the standard on many PCs. External addon drives are also increasing demand for this type of storage media. Offering up to 700MB of recording capacity, they can be read on most CD-ROM drives.

Data integrity can also be ensured through the use of tape storage media. According to FujiFilm it can be difficult to put a precise price tag on data loss. Value can vary greatly depending on the size of the business and the importance of the lost data. Nevertheless, some typical benchmarks in terms of dollars may be: the downtime for PC LANs would cost $18,000 per hour; and the downtime for UNIX networks would cost $75,000 per hour. Fujifilm's DLTtape IV offers a new dimension in high capacity storage, and is compatible with next generation DLT drives.

Tech Data Corp. is a global provider of IT products, logistics management, and other value-added services. In addition to its support of Storage Area Network (SAN) technology, Tech Data also offers network management, business intelligence, and data security products and services for resellers selling enterprise and workgroup solutions.

Imation Corp, a provider of data storage and information management, offers removable data storage solutions including magnetic and optical products for the enterprise data center, the network environment, and the consumer. For business users, Imation magnetic tape cartridges deliver data storage in data processing, backup, and archive applications.

PRINTER SUPPLIES

By providing customers with a way to purchase all the supplies they need for printing, your company will benefit with increases in repeat business as well as bring in new clientele. Replacement cartridges are a great place to start with inks, papers, and business forms rounding out the playing field. A major printer manufacturer, for instance, makes 20% of its revenue and half of its profit from supplies. And over its life, a $100 ink-jet printer can account for $400 to $500 in high-margin paper and ink.

POWER PROTECTION

Although it may never be used, an uninterruptible power supply (UPS) power protection device may be the most important piece of equipment that a business invests in. These devices can help to eliminate the destruction of equipment, prevent corruption of critical data files, and guard against surprise shutdowns. Customers will know you care about their equipment and its continued efficiency by offering a full line of surge protectors to compliment equipment sales.