05: Value-Added Reseller

In this episode, Steve Preda discusses several examples of successful value-added resellers and how the practice of customization of mainstream software packages expanded their profits and helped grow their companies.

 

Time Stamps

 

[00:15] Steve recalls a client of his — a software developer who was very good at motivating dealers to become committed to distributing software. This client was a value-added reseller, and Steve decided to dive into the concept of value-added reselling 

[00:58] Where value-added reselling comes from — began as a concept from smaller companies which were struggling to sell their software due to the advent of large companies like Oracle and SAP. The smaller companies began to provide integration and customization of the larger companies’ software. In other words, they became value-added resellers

[02:23] Example 1: How Steve’s former client, Zoltan Schwarz, expanded his small company, XAPT through value-added reselling. The company began by implementing Microsoft’s ERP systems for the Hungarian market

[03:15] In 2006, XAPT implemented a customized solution for a Caterpillar dealer. This set off a series of projects to customize solutions for other Caterpillar dealers — ultimately making XAPT an international success. In 2015, they reported a 60% net profit margin

[04:52] How larger companies can be platforms for smaller players to create a very profitable business 

[05:10] Example 2: Steve recalls purchasing a CRM system for his investment bank. This system was a customization of Salesforce for investment banks, but was sold at about 10 times the price of a standard Salesforce CRM license

[06:03] How using customization to create a community for your customers can increase profits

[06:41] How XAPT expanded to three times as large as the original business through value-added reselling

[07:45] Call-to-action to become a value-added reseller and to leave comments

 

Conclusion

Do you have any experience in customization, or how have you seen customization to be beneficial to other companies? How might your business benefit from value-added reselling? Consider becoming a value-added reseller to increase your profits and build proprietary solutions.

 

We’d love to hear your comments and questions! Here are some resources that you might find helpful:

 

XAPT’s website

Traction Equity website

Book a free consultation with Steve

Join a webinar with Steve

https://StevePreda.com