Resellers get chance in warranty market

Resellers get chance in warranty market

Resellers are being given a chance to tap into a potential customer base of around five million users thanks to a monthly warranty offering for older PCs and notebooks.

The catchcry "get into services" is often easier said than done for many resellers, but selling warranty by the month may just prove the answer to many a dealer's prayers in the slowing PC market.

The issue of warranty has always been a sticky one for resellers, and traditionally insurance companies have been the denisons of the market. However, Sydney-based company Warranty Works International has come up with a product that can not only offer ongoing revenue streams for dealers, but can also open the door to repairs and services.

In what could very well be a world first, M2M Warranty offers businesses and consumers warranties on PCs and notebooks that have outlived their warranty lifespans.

"People look at warranty companies with a magnifying glass because they want to make sure the company is still around in two or three years time," explained Warranty Works International director Michael Chappell. "The answer to that problem is monthly warranty agreements."

Chappell believes Australia represents a potential market of around five million users, with revenue streams of up to $20 million a month. Warranty Works also plays in both the manufacturer and extended warranty arena, providing services for the likes of Fujitsu and Dick Smith Electronics.

"In the current climate, people are holding onto their old computers for longer, upgrading rather than buying new machines," Chappell said. "[The monthly warranty] is going to create an additional source of income for the reseller."

Around a dozen resellers currently sell M2M warranty and offer different levels of protection. Silver-level protection, for example, costs $19.95 a month. The commission scale for resellers begins at 30 per cent for the first month's sign-up fee, then a trading commission of 20 per cent for each month's renewal with a credit card or direct debit account, as well as overrider commissions and bonuses.

"This can be sold through any channel," Chappell said. "We are predominantly looking for resellers because they have a ready-made customer base.

"It brings the customer back to the reseller, so they are more likely to come back to purchase upgrades."

But the warranty can also provide service revenue streams to resellers if they become part of M2M Warranty's national network of repairers.

"We have 300 authorised national repairers and many of those are resellers, so we are encouraging resellers to sign up."

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