Hardware Sales Are Alive and Well — as Part of a Solution

In an industry where the speed of change is head-spinning, how about this crick-in-the-neck news flash — hardware sales aren’t dead.

That’s right, the hardware sale is alive and well, particularly for the partner who can spin the right mix of gear, software and services into a total solution sale for their customers.

If you want to learn more about hardware sales and increased profit, you’ll hear all about it at the presentation, “How Hardware Bulks Up Total Solution Profit,” April 9, part of the sales and marketing track during the Business Success Symposium at the Channel Partners Conference & Expo in Las Vegas. The session will be led by Richard Chambers, president of America’s Return, a consulting and training firm that presents sales-development programs for service and sales organizations that rely on an indirect distribution channel.

America’s Return’s Richard Chambers

Channel Futures caught up with Chambers to get some insights about hardware sales, profit and partners.

Channel Futures: What myths are you going to dispel during your presentation?

Richard Chambers: There’s no money to be made in selling hardware. Distributors are only interested in quoting and selling an order as opposed to partnering with [partners] on the solutions and educating them. OEM vendors are dismissing [partners] as too small, but perhaps they (particularly SMBs) just don’t know how to pull the chain on those vendors.

CF: Why is this session topic important to conference attendees?  

RC: It’s of different importance depending on the partner’s business model. For example, if I’m a VAR, I might be thinking that [hardware] margins are so bad that I need to change my business model and become an MSP; and, in so doing, would be denying [myself] a better way to create profit if [I] understand how to sell hardware better.

If I’m an MSP, I might be thinking, ‘Why mess with hardware when services are so much more profitable; however, service margins have declined dramatically through competition over the last few years. And service leadership is continually trumpeting the point that the highest quartile of profitable MSPs sell at least 30 percent of their revenue in hardware, whereas the bottom quartile sells managed services exclusively and aren’t making much money at it.

CF: So, stop the presses? 

RC: If I’m an MSP, I want to learn how to maintain or build my hardware practice — and there are some right ways to do it.

That’s what I’m actively engaged in now with ConnectWise and Kaseya, from an MSP viewpoint, and Lenovo, where the pitch for hardware becomes “standardize on our platform.” From a hardware standpoint, reducing operating expenses is a way to increase profit.

What we’re seeing is that by standardizing on a hardware platform, [you’re] yanking out the variety of [vendor] endpoints that might be within a business and placing in there a standard endpoint solution, which makes it easier to provide the services in a reliable and predictable way. What makes that possible is a hardware-as-a-service leasing capability to help enable the per-seat, per-month, per-person financing.

CF: You intimated there are other ways to create more net profit. What’s another way?

RC: Other revenue can be …

… project-based. Rather than simply making a recommendation [for hardware] and turning that over to someone else, they engage with the billable project services — there’s revenue that flows through that.

I’m also going to talk about the internet of things (IoT) … it’s not called the internet of services. It’s endpoints – things – so if partners aren’t in the path of progress with IoT, they’re not pursuing their own competitive position very well.

CF: It’s one thing to know that selling hardware is very much an option for partners. What’s next?

RC: What’s next is how to do it. I’m going to teach attendees how to sell better. It’s one thing to have a strategic mission and be persuasive, but out sales methodology teaches partners how to get involved earlier in the sales cycle.