Symbol shifts towards channel model

Symbol shifts towards channel model

Symbol's Master Distributor, Melbourne-based Warp Technologies, has warned of risks for its vendor partner if the wireless product manufacturer appoints extra distributors during its shift toward a "totally channel-centric" business model.

Symbol currently sells around half of its mobility devices using the channel, and the other half direct, with plans to make its sales 80-20 in favour of the channel.

The US-based company announced the Australasian launch of its PartnerSelect program last week, which last year was introduced in North America, Latin America and Europe.

Newly-appointed A/NZ general manager, Kurt Hansen, said PartnerSelect would let Symbol's 28 staff devote more resources to serving the channel and improving its sales and marketing, whereas the previous program left areas of coverage that Symbol could not serve. Symbol A/NZ channel manager, Mike Seekamp, also said: "We haven't used these resources successfully. Currently we have a 50 per cent direct sales model. By shifting these resources into our partner community, there are more resources going to market development, to grow the pie.

"The old model had an inability to grow as quickly as opportunity in the marketplace presented itself. Symbol employees had to be experts in distribution as well. Now the right people can do the right thing."

Symbol currently offers three main products - data capture devices such as barcode scanners, PDA-type mobile handhelds, and 802.11-type wireless LAN infrastructure.

Symbol Australia predicts 35 per cent sales growth in 2003 and 10-20 per cent annual growth in coming years.

It said its growing demand for wireless devices needed an extra channel structure.

"We know there's plenty of market opportunities," Hansen said. "Enterprise mobility is building more markets. We have been operating in warehousing, hospitality and retail logistics. There's more growth in these markets but also new markets in areas like healthcare and government."

Symbol currently employs Warp as Master Distributor, with reseller partners including Skywire, Walker Data Vision, Ayr Data Systems, Datanet and Bizcom. Over the next year, it plans to double its channel strength.

"It's up to organisations who want to be a distributor to come and see us and see how they can add value," Hansen said. "We want to keep our relationship with Warp. Whether we need a second distributor depends on the program."

PartnerSelect will have two tiers and two tracks - business partners, solutions partners, premier business partners and premier solutions partners. The tiers will be determined on four levels- certification, contribution to sales, commitment and ability to support the customer.

Warp Systems currently employs 15 staff in Melbourne, Brisbane and Sydney, and supplies 650 resellers with Symbol products, claiming 20 per cent of Symbol revenues across Australia and New Zealand.

Warp sales and marketing director, Douglas Phillips, said that for seven years Warp had focused just on Symbol. This was the strength his company brought to the market.

Now, Symbol had to decide whether it offered a pull product - a broad product such as PCs that the market pulled for in a large scale approach, he said, or whether it offered a push product that still neededsome pushing towards market acceptance.

"A broadline distributor couldn't apply the depth of knowledge to bring the products to market," Phillips said. "What's still involved in the mobility market are issues of integration, communications, architecture and hardware problems - a complex solutions set.”

"We are still very much in the push, where we are pushing the benefits of mobility into the market. With the push you have to back it up with depth of service," he said. "If Symbol believe they are at the pull stage, it's their perogative to have as many distributors as they want." Phillips said he had already received an overview of PartnerSelect, a move he supported, and would receive a more detailed explanation of it this week. However, he seemed unaware his firm might be joined by other distributors.

"Our fear would be if Symbol got into bed with a broadline distributor who gives them a commitment of millions of dollars and doesn't deliver," Phillips said. "A broadline distributor also demands marketing fees, stock rotation and failed inventory is returned at no cost. These demands are not in place [here at Warp]."

Despite Warp's website claiming $2 million of stock and a sophisticated e-fulfilment inventory system, Phillips said Warp did not stock up as it knew the market. But if Symbol was seeking other distributors, it must believe there was other market demand that had not been met, he said. "We hope that our past behaviour and support of Symbol is recognised," Phillips said. "Some part of the Symbol business going to a subset of resellers or end user may be hit. But Symbol is refining what the PC market learnt and what the server market learnt. You cannot have a foot in both camps [channel model or direct sales model]. You have to be one thing or the other."

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