Are Component Resellers Relevent?

Mike Sax mentions my blog today on his blog.

However, Mike talks about Component Resellers and, by asking:

How component and tools resellers can re-invent themselves to provide value for developers?

he implies component resellers don’t currently offer value to developers, kind of like the old trick question:

So have you quit beating your wife?

Mike states that in the years before the Internet vendors needed our printed VBxtras catalog but says they don’t anymore because:

The Internet has challenged the value resellers used to provide. Finding the right vendor is only a Google or Yahoo search away. And if you want even sharper focus, you can just browse some of the component galleries out there, like on ASP.NET”

(One question to Mike; have you actually ever tried to use the component galleries on ASP.NET? It’s a hodge-podge and very difficult to use as we use it to try and find new vendors. Even my competitors do a much better job.)

So let me address his implication that resellers don’t provide value:

  • For those who care about price, we always offer lower prices than vendors. If developers are on a tight budget or buying for a lot of developers, they can almost always save money buying from a reseller like VBxtras and Xtras.Net.
  • For developers buying for a large number of developers and/or products from multiple vendors, they can aggregate purchasing.
  • If developers purchase on Net 30 accounts, they can establish the Net 30 accounts with us once instead of once per vendor,
  • If they buy from us at least, all their downloadable software purchases and all their serial numbers will be held in their “online library” at our website for future reference. No need tracking down the vendor when the bits are lost or the serial numbers are misplaced.
  • When developers buy direct from a vendor and they have problems the vendor won’t correct, they have no advocate. The developer is just one of probably tens of thousands of other developers whose complaints are lost in the noise (I have emails from developers who didn’t buy from us but wish they had because of this. I could post but don’t want to as it could get real ugly with those specific vendors…) If they buy from us and have a problem, we’ll go to bat for the developer. After all, there are not that many resellers, and as resellers we are much more focused on customer service than the average vendor. (If our customer service sucks, why would a customer buy from us? If the vendor’s customer service sucks but his product is the best, developers still grudgingly buy.)
  • If a developer buys direct, who is going to help them select amongst competitive products? A vendor will rarely tell a customer his competitor’s product are much better for their needs, especially if that vendor’s sales people are commission-based. Since we carry multiple products in a category, we can help developers who need help selecting products to decide what best meets their needs, especially since we are the most focused reseller amongst our competitors (Focus: VBxtras = VB6/ActiveX only, and Xtras.Net = .NET only).
  • Though I can’t speak about other resellers, one of the benefits of buying from us is our new XDN program, short for Xtras.Net Developer Network. We have three levels: Basic, Plus, and Professional (actually Plus hasn’t been finalized as I blog but will be soon.) We position XDN as “Empowering Serious .NET Developers” and our Professional membership ($99/year) has some pretty outrageous benefits, we think. XDN targets those developers that are influencers amongst their peers, especially the ones that evaluate and buy and/or would like to buy a lot of 3rd party products. How is this a benefit of buying from us? Starting this month we give developers 10% of their purchase price (5% on Microsoft products) toward an XDN Plus ($25) or an XDN Professional ($99) annual membership. We plan to expand that concept over the coming months. The choice seems clear to me: pay full price at vendor’s site with no additional benefits, or pay a discount at VBxtras or Xtras.Net and get a lot more benefit than just the one product.

These are just some of the reasons why I believe component vendors still add great value today. I’ll blog about more reasons in the future.

However, I will say that we are having challenges. Our two biggest challenges:

  • How we can stay top-of-mind? How do we get the developer to remember to come to us instead of just going to Google? (This isn’t really that hard for us to solve, and we are hard at work on it right now.)
  • Much worse, how do we get past Corporate Resellers? What are Corporate Resellers? They are the general resellers that large companies contract with to manage all their software purchases. These corporate resellers typically offer zero value to vendors and developers yet are gaining an increasingly large share of purchases as Windows development becomes more enterprise critical. It is almost impossible for us to compete with these corporate resellers. We go to trade shows and developers tell us “We love your catalog and website. We download demos all the time!” When we ask if they buy from us they say “No, we have to purchase everything through our corporate reseller” and they typically don’t seem to care to help us and try to get around that requirement. Grrr! It makes me want to limit my website and downloads to only people who can buy from us if they decide to make a purchase!

On the other hand, like so many other companies that have been affected by the Internet, we are evolving, and “How?” was what Mike Sax’s asked in his blog. In two to three years, we’ll probably look very different than today, offering lots of new services. I don’t think that means we’ll stop being a component reseller; on the contrary I think we’ll become far stronger as a as we evolve and add these services.

So how will we evolve, and to what? Only time will reveal. :)

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