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Authorizations: Are They Worth The Hassle?

By Karen Franse, Bellmore, N.Y.
7:13 PM EST Thurs., July 01, 1999

Wayne Spivak of SBA Consulting, based here, is a small VAR with no time to waste. But, he says, manufacturers are causing him and other VARs to lose valuable selling time applying for too many authorizations. "For almost everything I want to buy, you have to get authorized by the manufacturer," Spivak says. "I wanted to sell a product called a Whistle InterJet. Guess what? I needed an authorization. I wanted to get prices on an HP NetServer. I had to fill out an authorization. 3Com cards, authorization. Microsoft NT Server, needed an authorization."

Spivak says he wouldn't mind the authorization processes if he got something for the time he spent. But he believes manufacturers require authorizations simply to keep tabs on who's selling their products, not to offer VARs additional services or differentiating credentials. "I don't get any benefits because the authorization says 'HP indirect reseller,' for example. I'm not signing up for a program, but for indirect distribution," Spivak says. "If you're going to make me get authorized, offer me leads or tech support."

Like other VARs, Spivak hoped that buying through distribution would give him an advantage, relieving him of the paperwork involved: "The problem is, it's 20 minutes here and a half hour there and another 15 minutes there. Most VARs have fewer than 15 employees. Do you think we have time to spend on the phone [like this]? That's a lot of time."

Spivak says he talked with representatives from Merisel Inc., El Segundo, Calif., and Pinacor, Tempe, Ariz., about the problem: "They said, 'It's not our fault. It's what the manufacturers want.'"

While Pinacor exec Jim Crawford, group vice president of service operations, says the distributor cannot sell to VARs who are not authorized by virtue of the distributor's relationship with its vendors, he does say the distributor can help smooth the process. He says Pinacor has people on staff to help the reseller complete the form correctly -- to make it as painless a process as possible. The distributor, he says, submits the form on the VAR's behalf and tracks it with the suppliers. When the authorization is granted, they enter it into their system, verify the authorization and then call the reseller.

Crawford says it's important that VARs realize most authorizations, while applied for through one distributor, can be used across the board. VARs shouldn't have to complete the same authorization requests with multiple distributors.

But VAR Joel Pelinger, president of Solar Systems Inc., New York, says his problem with the authorization process is filling out multiple authorization forms for the same manufacturer. "There has to be a better method of obtaining authorizations," Pelinger says. "When you get authorized by HP for their servers [for example], you shouldn't have to fill out a whole new authorization [form] for another of their products." Pelinger suggests the industry turn to a standardized authorization process, letting a third party like CompTIA run the practice. "They could manage authorization levels for all manufacturers in the industry and create a standardized process," he suggests.

Another problem VARs have voiced is the time it takes to get authorized. It could be 10 days to six weeks, depending on the supplier's process at their end, Crawford says. Spivak, however, doesn't have time to wait: "You're making it difficult for me [to buy your products], and you're going to lose sales," Spivak warns.

Vendors are taking heed and starting to realize that not all VARs can plan ahead for required authorizations. IBM Corp., for example, has given its distribution partners the right to preapprove resellers so faster delivery of product can be accomplished. "Folks aren't necessarily applying in advance. They apply when they want to buy product, so that first time is when you have a compressed amount of time to respond," explains Frank Vitagliano, IBM's vice president, worldwide channel strategy and marketing in Atlanta.

As a result, IBM recently revamped its authorization process, giving distributors the right to preapprove qualified VARs on IBM's behalf. "Assuming they meet the initial criteria, we allow the distributor to get resellers the product. Then, when there isn't as much pressure relative to completing [that first] transaction, the rest of the requirements get completed."

Vitagliano says IBM has also addressed Spivak's point about making the authorizations worthwhile to the reseller. Only authorized IBM resellers, he notes, can receive education, financing, marketing incentive, sales and technical support, and only authorized VARs can take part in IBM's new SMB lead generation program. It's true that the authorizations, explains Vitagliano, give IBM an idea of who is selling its products and into what markets. But that profile information allows IBM to tailor programs to that specific group of resellers. And, it shows IBM who is committed to selling its products. "I want business partners to invest in IBM," Vitagliano says.

Spivak's message is the same: He wants vendors to invest in small resellers like him.

©1999 CMP Media

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