Strategic focus on the value of wholesale

Posted on May 17 2017 - 8:30am by Editorial Content

VOW UK Managing Director Adrian Butler, spoke to PrintIT Reseller about the wholesaler’s strategic decision to move away from non-core activities, and its renewed commitment to focus wholly on delivering the value of wholesale to its channel customers

Adrian Butler, Managing Director, VOW UK

Adrian Butler, Managing Director, VOW UK

VOW is the biggest company in the EVO Group, bringing in around £300 million of the group’s combined £550 million turnover last year. As part of a review that saw the group simplify its structure in 2016, a strategic decision to focus on core activities and put a stop on non-core undertakings was made.

This meant calling it a day on the bokz reseller programme, an initiative designed to grow dealers’ businesses by combining their customer facing skills with EVO’s logistics, procurement and marketing capabilities; Headroom, the group’s marketing and business services agency; and VOW’s managed print services (MPS) programme. It was this news in particular, that received a mixed response from the channel.

First foray

VOW first entered the MPS space towards the end of 2011, partnering with M2 to deliver it on behalf of members of its then VOW+ partner programme.

As a wholesale partner, people trust us to get the right goods on the shelf, accurately pick, fulfil and deliver their orders on time

As a wholesale partner, people trust us to get the right goods on the shelf, accurately pick, fulfil and deliver their orders on time

Butler explained: “We did our research and looked at the facts. MPS had been around for a number of years, and deployments were largely within the top end mid-market and lower end corporate sector, a dealer’s sweet spot.

“However trends showed that it had come down a level and was becoming ever more prevalent within businesses with one to two devices, there was a market there for our customers and so we did something about entering it.”

He added: “Most of our resellers have a top tier of clients who are prime for MPS, but as a wholesaler we didn’t have the infrastructure in place to provide a complete end-to-end solution. We didn’t have any service engineers or a team to handle first line calls for example, so we partnered with M2. This partnership with M2 worked really well and we enjoyed and continue to enjoy, a successful business relationship.”

VOW saw some early successes with a number of its partners signing up, however over time it became evident that not all were content with the offer. “In essence, the end-users’ contract was with M2, the reseller got a commission on each deal, but as time went on, many weren’t comfortable with the fact that they didn’t own the customer relationship, an issue that’s problematic across any number of areas, and one which is not exclusive to MPS contracts,” Butler explained.

VOW-led MPS

With contraction in both the OP and EOS markets, VOW saw MPS as an opportunity for its resellers to plug revenue gaps and increase customer wallet share. With this in mind, in 2014 it structured a new offer in consultation with the MPSA (Managed Print Services Association). Its aim was to provide a more flexible and accessible solution, with improved invoicing, reporting and communication tools which would enable resellers to secure customers and expand the services they currently provide.

The initiative was designed to help resellers derive all the benefits of a brand agnostic, customer-focussed managed print service and initial interest was high – some 78 per cent of the resellers who attended the launch event signed up.

“We built on this, invested heavily in people and infrastructure, to develop a VOW-led managed print solution,” Butler said, adding: “We invested in category specialists, internal sales support, and a team of administrators as well as people to take frst line calls, monitor and manage the MPS contracts.”

The service delivery was provisioned through Cura Technical, who according to Butler, provided a first class service.

“We really felt we’d got something there and we did see some deals won. 18 months on, some partners were confident running their own contracts, but overall we weren’t seeing sufficient traction. We had to look at the business case, and this led us to take the hard decision to cease what was essentially a non-core activity and divert the investment back into our core business,” he said.

Butler explained that experience has shown that dealers trust and have confidence in VOW, but are not comfortable in handing work over to a third-party. “When it comes down to delivering managed print services, we’re not positioned to deliver it all in-house. The only real way to become an expert is if you acquire a business and that’s not our core,” he said.

VOW is the biggest company in the EVO Group

VOW is the biggest company in the EVO Group

“As a wholesale partner, people trust us to get the right goods on the shelf, accurately pick, fulfil and deliver their orders on time, and so we made a strategic decision to stick with what we’re best at – being a great wholesaler from a service point of view,” he added.

One could argue that by pulling out of MPS, the wholesaler could potentially lose the revenue associated with consumables fulfilment. But Butler disagrees: “If our resellers can make money through MPS, then ultimately that makes their business healthier. As a wholesaler that means I’ve got a healthy profitable reseller.

“I suppose you could look at it from the point of view that if a reseller has an MPS contract and isn’t fulfilling toner through you then they’re moving away from you. But I don’t see it that way. It’s not always about VOW getting more spend, it’s about longevity and with over 2,200 resellers, we have a very healthy client base, the channel is a lot more resilient than people think,” he said in conclusion.

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