The makeup of the channel at Comcast Business has changed over the past year — with more and more value added resellers selling full solutions to their customers, including networking and data connection services.
This is happening everywhere and there are many good reasons the VAR community is embracing this new business model. Two of the major drivers include the proliferation of the cloud and the increased customer demand for a single vendor to work with on their telecom and IT technology needs. VARs are either shifting the way they do business or partnering with telecom agents to provide their customers with everything from the internet connection to the voice system.
One of the greatest reasons to think about broadening your business from being a traditional VAR to also becoming an agent or broker of data connection services is financial. Operating a commission-based, recurring revenue program rather than exclusively reselling products gives you an important, more predictable asset: cash.
Think about it. You won’t have to outlay money to your vendors and wait, sometimes longer than you’d like, for payment from your customers. The recurring revenue model enjoyed by agents eliminates the need for you to tie up your cash, thus providing you with a more unencumbered business model.
Specifically:
- This is a commission-based plan. Your cash and credit aren’t used as security to creditors.
- There is a perceived lower cost of goods sold, no inventory fees and lower administrative costs, meaning more cash on hand.
- The predictable commissions generated during the term of the agreement translate to better cash flow.
- Possible stronger standing in financial community since the commissions are not tied to creditors, giving you the opportunity to fund the growth of your business.
- Potential for lower investment into resources like administrative, technical support and accounting, since the telecom vendor holds the agreement with the end-user and directly provides those services.
As the market continues to shift and as data services becomes even more important in providing customers with the bandwidth and connections they need to run their business, think about the opportunity before you. Moving to a commission-based plan will provide consistent cash flow, less money tied up with creditors and a perceived better financial position for increased credit with financial institutions.
Barry Williams is senior director of indirect channel sales for Comcast Business.
