Acer America Aims To Get The Word Out To Resellers

While Austrian-born Arnold Schwarzenegger may be the big man among politicians, his fellow countryman Rudi Schmidleithner is becoming a big man among solution providers. Schmidleithner, president of San Jose, Calif.-based Acer America, recently touched upon a wide range of topics with Senior Editor Joseph F. Kovar. Chief among them is the company's move to convince the channel that Acer Aerica is the alternative to those PC vendors that compete with their solution providers.

CRN: When you came to the U.S. early this year, what was the state of Acer?

SCHMIDLEITHNER: We were very professional, but small. We tried to do everything even better than our big competitors in the U.S. at the time, but we did not develop our own way internally.

CRN: Can you give me an example?

SCHMIDLEITHNER: We tried to compete with our sales force, the same as the competition. But if you are much smaller, you don't have economies of scale. So you cannot win. You can live only by trying harder instead of doing it smarter. That was internal.

More important, what we realized externally [was that] resellers were heavily under attack from two sides: retail and direct vendors.

Retail [in the United States is] very different from Europe. It's very strange. The system we have here is mail-in rebates. Typically, [retailers] advertise product after mail-in rebate below the buyer's cost because they calculate on a certain percentage of [rebate] claims that come back. A normal reseller who is doing a professional business with his end users or his enterprise customers, he cannot do this. So he seems not to be competitive in this field.

CRN: You have two different product lines, one for the retailer and one for the reseller, right?

SCHMIDLEITHNER: No, we do not have this. We have two different product lines, that is correct. One is for private users, one is professional. But both have good quality. So there is no need to say one is a so-called consumer line because if an enterprise needs a big quantity of this product, we could not sell it.

Every reseller has access to our whole product line. He can sell the consumer product as well as the professional. 'Consumer' does not mean we make it available only at selected retailers. We make sure the reseller has access to the best prices even for the consumer products. This is important. [This industry] invented difficult systems to have excuses to give especially good offers only to retailers.

CRN: But you don't do that?

SCHMIDLEITHNER: Don't do that at all. If we cannot maintain channel integrity, cannot make absolutely sure that our resellers can sell the same product at the same price, we will not accept [such] orders.

It is key in our strategy for channel integrity. Others do it differently. Others say, 'For my channel integrity, I go in this segment direct, and in the other segment retailer and special deals, and in another segment I do it by distribution.' We bring this together or we do not do the business.

CRN: Are you looking to recruit new solution providers?

SCHMIDLEITHNER: In the last few months, we got several hundred new resellers who have never resold Acer before. [Many resellers] don't want to sell hardware anymore. We have a lot of discussions. They say, 'OK, I don't touch this business. I focus on service.' But it's easy. They can also do the hardware business. There's no reason not to sell hardware, at the right mix and with the right products. And we think we are the only vendor who can offer this to the reseller again in the U.S. That you can sell monitors, notebooks, PCs and you can also earn money with it, and it's not embarrassing that tomorrow [you see] a similar product advertised by a retailer after a $200 mail-in rebate below the cost of what you just sold.

When we analyze the sales of our products, it is very funny to see that we do the most aggressive offer to the market in the entry-level price. The retailer takes the $699, $799, $899 notebook segment. But with a company like Acer with similar low price points in the market, we see the reseller hesitating to sell this product. You can sell a notebook from Acer that costs only $799, and you can do margins with it, and you don't have to fear that tomorrow other organizations have this product $100 below.