A Better International Solution for VARs

“It’s ludicrous that I have to pass off international deals and not get the credit for the sale.”

“It sucks that I can’t support my customer internationally with the same level of quality I do for them here in the US”

“I know I have an international team but we get quotes too slowly and it makes my customers unhappy…”

These are real quotes we pulled from the 200+ conversations we’ve had with sales reps in the channel, just this quarter. It just doesn’t make sense for a sales rep to have to pass on an international opportunity, or worse, to hand over a deal to an in-market reseller and be cut-out completely.

When you pass on an international deal, it means your client has to find an alternate solution to buy the hardware they need for their international sites. In our experience, that “alternate solution” means purchasing the equipment from a foreign VAR or going through the VAR-VAR network. Both of which are expensive and inefficient options (we’ll discuss more on why in the next section.)

Fortunately, there is a better solution where both you [the sales rep] and the client wins.

Sales reps can sell international deals and receive full credit for that sale.

Sales reps can support their client’s international needs with a cost effective and turnkey solution.

How do we know?

Because we help hundreds of sales reps sell international deals on a daily basis, while simultaneously lowering their clients’ overall IT costs, deploying faster, and giving the client more control over their assets.

We do it by taking advantage of a procurement model we’ve coined Centralized Procurement.

Simply put, Centralized Procurement is a sourcing model that advises the client/buyer to:

“Purchase all the hardware you need globally, here in the US. Once the equipment is ready, we’ll get it where it needs to go.” (Side note: this is breaking the mold from how most international deals are currently executed.)

From a fulfillment standpoint, the Centralized Procurement model can be seen as:

  1. Client purchases the equipment in the US via their preferred sales rep
  2. Equipment is drop-shipped to FGX in the US
  3. FGX ships directly to the client’s international locations

By using this model:

  • The US sales rep can sell their client whatever hardware they need internationally, all from the US, thus earning full credit on that sale. (FGX makes international deals feel like domestic ones)
  • The end-user/client saves 10-15% on their international hardware costs when compared to purchasing “in-market.”
  • The end-user/client also gains the benefits of centralizing their procurement

Using Centralized Procurement, over 500 sales reps across hundreds of VARs have partnered with FGX to sell over $250MM in deals internationally in the last 3 years.

So how exactly does FGX fit in to the deal flow?

FGX comes in after the hardware is sold to the client. As a specialty IT hardware deployment firm, we provide a turnkey international shipping solution to execute on the post-sale part of the deal. If you’re interested, you can learn more about our process here.

Why should you trust this model over what’s available in The Channel today?

The Centralized Procurement model is consistently winning deals when pitted against the in-market VAR and VAR-VAR solutions simply because it’s better for the client. It’s cheaper, more efficient, and more secure.

In the following section we’ll discuss the shortfalls of the VAR-VAR model, and show you why the Centralized Procurement model performs better.

Click here to jump to how international deals are structured under the Centralized Procurement model, and its benefits.

International VAR-VAR model vs Centralized Procurement

Whenever an in-market reseller fulfills an order, or whenever a deal is passed off to the VAR-VAR network, this is what happens:

After the client confirms an order, the international reseller will place their own order with their distributor or OEM for the hardware. The reseller will then have it imported into the local market and delivered to the client’s local office or data-center.

All along the way margin is added by the in-market reseller, the distributor, and the OEM so they can each turn a healthier profit and more than cover the marginal added cost of international fulfillment.

In more complicated markets like the BRIC countries (Brazil, Russia, India, China), the collective markup can result in the customer paying up to 3x the cost to procure the same exact gear in the US.

Even in less complicated markets like the EU and some countries in APAC (Japan, Singapore, Korea, etc.), we’ve worked with customers who paid an international mark-up of 1.5x — 2.5x more than the cost to buy the same equipment in the US.

To help visualize the total cost of an in-market deal, we’ve summed up the five cost items into the below equation (the output will tell us the cost of the for the client):

International VAR-VAR Model
Cost to purchase the goods +
OEM’s international markup +
Cost to import and deliver the goods into the market +
Overhead costs for the international reseller to run their business (Salary, Offices, etc.)+
Profit margin for international distributor & reseller

= Total Cost to Buyer

The result is: on top of the cost to purchase the IT Equipment, the customer has to foot a hyper-inflated bill that consists of multiple markups. More importantly for you, since the deal is going through an international reseller, the you may end up losing out on some or all of the deal credit.

The only one really profiting in the VAR-VAR model is the in-market reseller.

But the fact of the matter is, only two of the above five items are required to fulfill an international order (thus resulting in a much cheaper solution for the client):

Centralized Procurement Model
Cost to purchase goods in the US (You as the US reseller) +
Cost to import and deliver the goods into the market (FGX)

= Total Cost to Buyer

As you can see, with three less cost items, the Centralized Procurement model is a simpler, more efficient model for international procurement and deployment.

US sales reps can use the Centralized Procurement model to sell international deals in a effortless and elegant way:

  • The sales rep sells the client any hardware needed internationally in the US, like selling a domestic deal (thus earning full credit for the sale.)
  • FGX will manage the rest of the deployment door-to-door

The Centralized Procurement model is also an easy sell to the customer because of the additional benefits the customer gains when they procure from one location. For example:

  • The client doesn’t have to go to another provider for an international solution
  • The client saves an average of 12.5% on their international IT hardware spending
  • The client can asset tag and configure their gear prior to deploying
  • The client has full transparency into their supply chain, they know which partners

If we’ve convinced you to even consider selling an international deal using the Centralized Procurement model, please don’t hesitate to reach out with any questions you may have. We have an entire team dedicated to helping VARs sell international deals.

If we’ve completely convinced you to start selling international, getting started is easy: send us an e-mail at sales@fgx.com to start a conversation. Even if you don’t have a live international opportunity yet, please feel free to reach out to us to learn more or just establish a relationship and say hello!

Do we already work together?

If you’re employed at a top 50 VAR, it’s highly likely we already work with many of your colleagues. We’re also working with teams at small to medium sized VARs on a daily basis to help them support their client’s global hardware requirements.

If you have any questions or want to pick our brain on selling international, please feel free to reach out to us here.