Is it a Good Idea to be an IT Hardware Reseller After All?

The IT hardware reseller business landscape has changed a lot since it began way back in the early 1990s. In fact it always existed in India, but its pace quickened since 1990, when the government decided to promote the MNCs business in India rather than promote its own manufacturing. China provided cheap labour and India provided marketing, branding and a market of buyers for these IT hardware products.

The Evolution

Those were the days when Internet was just being developed and it didn't have any significant presence on the horizon. Physical reselling was the order of the day and especially in the diverse landscape of India, MNCs found it difficult to navigate though the Indian market dynamics without the help of the reseller community. Hence, the reseller system thrived and grew by leaps and bounds and generated immense scope for those who were in this segment. Resellers were the ones who drove IT business in India - this was the bottom line.

However, in another decade or so, the scene completely changed. The internet was booming and now the manufacturers had an easy platform to reach their end customers and the end customers had an easy platform to reach their brands.

The concept of E-commerce was however still not much developed and there was an equal opportunity for both E-commerce and the physical resellers.

As the 21st century progressed however, the online commerce became very easy and cost-effective to manage. Online platforms could capture millions of visitors daily and sell many more items than the physical resellers could hope to do. The progress of technology had completely overturned the equation by the end of the 1st decade of the 21st century.

The downslide trend of the resellers had begun and is going to continue.

Changed Scenario

Many IT business watchers and perhaps many IT business people also have perhaps not thought about this - that the equation between the vendors and the resellers today s not the same as what it was in the 1990s. Back then, the vendors used to see the resellers as important link in their business supply chain and used to treat them as such.

Many IT business watchers and perhaps many IT business people also have perhaps not thought about this - that the equation between the vendors and the resellers today is not the same as what it was in the 1990s. Back then, the vendors used to see the resellers as important link in their business supply chain and used to treat them as such.

However, today, perhaps they are not necessarily seeing them as essential for their business supply chain, never mind what they say in the webinars and interviews and in meetings with the reseller community.

Let's call a spade a spade - Having an easy, low-cost and quick access to the mega-tech called E-commerce, which has developed in a mature form now, they are not so much dependent upon the reseller community as they used to be earlier. As time progresses, this is going to reach the small towns and far-flung areas of India. More and more solutions and services are going to be online and perhaps there won't be much need for a physical reseller community.

Let's face the reality - We can't stop the march of technology. E-commerce is here to stay.

Even without the Corona, reseller business is on its way out. It's just a matter o time - perhaps it will take a few years to die.

The truth is that many vendors today are treating the resellers as well as the E-commerce as end-customers.

Once a reseller or an E-commerce platform picks up a stock of IT hardware products, the vendor considers these products as sold. Now it's the online and offline reseller's headache to sell these items further and to recover their investment. And they have to compete against each other in this effort to further sell these items, a competition in which the E-commerce wins simply because it is the technology of today.

Resellers are spending a lot of time and energy in fighting the E-commerce, which may not be fruitful in the long run, because as I said earlier, if the vendors treat the resellers as end-customers, then the resellers are left with these pieces to sell and the customers are comfortable with E-commerce. They don't want to go looking for a reselling store. And in any business customer is the ruler.

Resellers need to understand this new perspective - perhaps, they are no longer resellers, but the end-customers.

I feel this is a situation in which only the biggest distributors, who have direct access to very large buyers will survive - and they too may begin to find it difficult after a couple of years. Most small and medium range businesses will perish - unless they want to spend a large amount of money on generating sales leads, but they don't have those kinds of resources.

So, if I can't sell 2000 laptops, why should I spend money on purchasing them?

It doesn't make any sense.

What will Work?

Even in today's condition, some work that the resellers do is essential and perhaps they should devote more time on those -

Providing networking services, installing servers and networked infrastructures, hosting and maintenance services and so on

Providing Cloud services, datacentre services

Either joining a large E-commerce platform or jointly managing E-stores platforms - However, building a platform is one thing, bringing traffic on it is quite a different matter. There should be large amount of traffic on the E-store platform, otherwise it won't work

Servicing the malfunctioning hardware

Diversifying into manufacturing if possible

Integrating themselves more into the online format of business

The resellers need to think what they can do in an innovative manner. Only then they can survive in the changed situation.

Read more from Dr Archana Verma here.