You may have zero experience with selling international hardware deals.
Or, you may have some experience with selling international hardware deals. But, it most likely failed or it was more painful than it was worth. Oh, and you either lost commission on that deal or had to pass your client off to an international VAR (which is even worse).
In either case, it doesn’t matter now that you’ve found FGX. After reading through these pieces, you will be able to start selling international deals from the U.S.
You’ll be able to earn full commission while fulfilling your client’s international requests. Also, the solution you’ll be able to offer your client will be leagues better than what the VAR market is presently doing.
But before we tell you about FGX’s solution, we’ll tell you more about the channel’s present day solution. It will help you understand your options and where FGX fits in.
The Channel’s International VAR “Network”
The international VAR “network” is exactly what it sounds like. There are local VARs in each country that together make up a “network.”
This “network” isn’t an official network, which is why we put it in quotation marks. Everytime a company wants to use an international VAR, they have to research, vet, and onboard a new foreign company. Besides the administrative headache of working with the international VAR, there are also cultural difficulties like: managing time-zone, SLAs, and language barriers. We’ll get into the business reasons for why international VARs aren’t a good solution shortly.
As of now, buying through the international VAR “network” is the status quo.
When the channel builds global solutions, they use the international VAR “network.” Each VAR has their own way of re-selling this network to their American clients.
If you’re part of a big VAR, you might have an international team that you need to pass deals off to — which sucks. You lose the commission on the deal and have no control over the quality of the solution.
These international teams usually lead the client down one of two “solutions:”
- A Referral-as-a-Service Program (RaaS Program) – We’ve seen many different flavors of RaaS programs over the years.
- An International VAR Re-sell Program (AKA: VAR-to-VAR – The VAR packages the services of an international VAR, marks them up and re-sells this to the client in the U.S.)
The RaaS program is when the VAR refers the client to the international VAR. The client will have to onboard and pay the international VAR. The international team will then get a commission for that referral.
Some US VARs use an International VAR Re-sell program. These US VARs simply resell the international VAR as their own service.
It’s the same exact solution as the RaaS program except the client only has to work with the US VAR. Fundamentally, both programs are the same — a re-packaging of the international VAR.
Why is re-selling the international VAR network such a bad thing?
First, you don’t get the commission. It goes to the international VAR.
Second, it’s more expensive and slower for the client.
International VARs have high base costs for buying the hardware from the OEM. They then mark-up the hardware and import it into their country.
They pass these costs onto the rest of the supply-chain. By the time it reaches the customer, the in-country cost can be 1.3-3x its US purchase price (depending on location.)
They also have long lead times for getting the hardware in-country.
This is NOT an effective solution for either the US salesperson or their clients.
No VAR sales rep wants to pass off their client for reduced or zero commission.
No VAR sales rep wants to give their client a bad solution, as this risks their relationship.
No client wants to onboard a separate VAR for each of their international sites.
No client wants to overpay for their hardware.
No client wants unreliable lead times and to have no control over their hardware.
So, we created our own solution.
FGX + U.S. VAR
FGX is a U.S. based company that acts as a deployment platform for IT infrastructure. We do not sell any hardware.
This is what an international transaction with FGX broadly looks like:
- You sell the hardware to the client as if it was a domestic transaction. Boom. You get full commission on the deal. (When we have our first discovery call with you, we’ll get into the specifics of how FGX helps you manage international SKUs and warranties, etc.)
- After it’s sold, FGX moves the hardware from the US to the international destination.
This eliminates the need for international VARs, and with that, their margins. On average, this reduces the client’s CAPEX by 8 to 12% and their international vendors by the dozens.
This is the beginning of what’s possible.
- FGX, the VAR, or the client can image, asset-tag, rack & stack, etc. the hardware before it’s even deployed. This would be impossible when using the international VAR network.
- FGX can store the client’s purchases for you until the exact time they need it in-country. They can choose the exact date they want everything delivered.
- FGX can bill the deal in any country while still having the hardware sold in the US.
Your client will save money and time by buying everything from you. They’ll also have a platform that gives them full control over their hardware. They can decide where things have to go and when they have to get there.
You may be thinking to yourself, so FGX stages and ships the hardware internationally? Are they just a shipping company that does integration?
Shipping companies are not built to support this specific commodity globally.
Some shipping companies can ship IT infrastructure into Western markets, like Europe and Canada. But even then, they often mess-up both US and foreign tax processes as well as the relevant compliance requirements.
IT infrastructure is a heavily regulated commodity with strict import laws.
Shipping companies only deal with the logistical movement of the commodity. They can’t import the commodity into the country nor manage the international trade requirements, let alone deliver to the customers site.
FGX deploys this commodity door-to-door. We manage all the tax, customs, compliance, and legal requirements. All our services support the management and movement of this specific commodity.
Furthermore, clients usually have tax and commercial strategies when buying their IT hardware.
We ask the right questions to put the client in a position to pursue those strategies. Asking smart questions is a core part of our process for selling international deals.
FGX is a one-stop shop for the commercial and physical management of IT hardware.
Last year alone, we helped VARs sell $215MM of hardware they otherwise wouldn’t have.
Here’s a link to a quick case study that we did for a global oil company.