Big VARs Embrace Belkin's Field-Sales Effort
Compton, Calif.-based Belkin kicked off its channel effort in mid-2005. The company's sales, which topped $1 billion last year, are about 30 percent through VARs and 70 percent through retailers, according to Gregg Prendergast, vice president of sales. "I'd like to get that to a 50-50 mix," he said.
The commercial channel offers more growth opportunities for Belkin, which currently does a big chunk of its business via retailers and audio/video integrators, and VAR sales jumped 40 percent in the fourth quarter as the company's field-sales team got up to speed, Prendergast said.
Belkin has seven regional field reps, four of which were added this year. Part of the company's challenge is overcoming the perception that it is largely a maker of cables and surge protectors, Prendergast said.
For example, in March, Belkin plans to release the Belkin Pulse network management appliance, which plugs into a network and pulls SNMP and other data from servers, routers and printers. A hosted "dashboard" service will enable solution providers to securely monitor the network over the Internet. Ten of the appliances with a one-year subscription will carry a list price of $1,499, the company said.
Belkin's product lineup also includes racks, enclosures, KVM switches, UPS products, hubs and wireless networking products, as well as laptop and iPod accessories. Though the products aren't necessarily strategic to VARs, the company offers partners the opportunity to consolidate purchasing and enhance margins on large projects, Prendergast said.
One solution provider attending the company's VAR event on Sunday in Los Angeles, connected with the Grammy Awards, agreed. "Today, we've replaced a lot of the little sources, and Belkin is the primary entity for accessories," said Bruce Geier, president and CEO of Technology Integration Group (TIG), San Diego.
Although TIG could source some of the products at a lower cost elsewhere, it's easier to work with Belkin, particularly because the company is providing field-sales support in bid situations, according to Geier. "We're going to drive more business through them," he said.
En Pointe Technologies also finds Belkin's field-sales support and training for its sales staff a plus, said Dave Mochalski, vice president of sales for the El Segundo, Calif.-based solution provider. He said even though Belkin's products may be low in dollar value, they are rich in margin. "It's a margin enhancer for us," he added.
Belkin's roots in consumer products have given the vendor "a great focus on creative design" that translates into the commercial market, said Dave McDonald, president of Softchoice, a Toronto-based reseller to commercial accounts. "They have an understanding of how to develop the VAR and commercial business," McDonald said. "It's about relationships."
One challenge for Belkin is how well it can translate its success with large VARs and commercial resellers into working with smaller solution providers, an effort that Prendergast said was on his agenda for this year. He said he's forming a VAR advisory council to help tweak the company's programs.
"Even for a medium-size VAR, a lot of them are buying from three different people. We're looking at them to try consolidating," he said.
Belkin currently has about 1,200 VARs taking advantage of its Margin Maker program, which provides up-front rebates of up to 5 percent at the time of purchase based on volume commitments, beginning at $100,000 a year, Prendergast said. The program also includes deal registration, government and education support, seed units and market development funds. The open-ended MDF program is based on a case-by-case evaluation.