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Promotional schemes have always been an inherent part of IT distribution.
Jithender Tatia of Vivek Traders notes that delayed settlements of schemes sours
partner-vendor relations. However, Bharat Bhushan of RR Systems feels that
delayed settlements are a part of the game and dealers have learned to live with
it.
Vendors delay reimbursement of schemes...
Usually a lot of discrepancies crop up during and after the scheme period.
This is because the companies draft the scheme document, which is silent in many
aspects, as they are not bold enough to communicate the do's and don'ts,
fearing some loss. Also, the interpretation is changed for their benefits.
Delayed settlement adds to the woes of dealers, who usually do not go into many
details. Whenever some kind of controversies come into the picture, decisions
are taken in the favor of the company. This tends to deject partners, making
them feel deceived and results in a strained relation with the principal.
Cumbersome paper work delays settlement...
The settlement of schemes usually takes time because of the various
approvals required and voluminous paper work. Cumbersome processes like record
maintenance, inventory tracking are involved. Also, schemes put a lot of
pressure on the dealer to sell and generate volumes. The settlement of schemes
should be such that it fulfills the expectation of the people by and large who
are the beneficiaries. If they lose the trust, then the next scheme will be a
failure.
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“Untimely
settlement after the scheme adds to the woes of
dealers, who usually do not go into many details”
-Jithender Tatia
Director, Vivek Traders |
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Schemes encourage unhealthy competition...
Schemes are by and large effective if they are properly planned and executed
by vendors, keeping the channel's benefit in mind. But mostly, dealers either
interpret the scheme wrongly or get over excited and indulge in under-cutting
leading to re-alignment of the bottomlines. These unethical practices lead to
unhealthy competition and create confusion in the market.
Schemes have become a necessity...
Schemes add a lot of burden to the dealer and the distributor to keep track
for their own benefits. Also a lot of paper work is involved at the end about
who is supposed to present the claim to the company. The business rules of
offering the scheme has been from quite long but the scenario has changed more
in the last four years, where schemes have become a necessary compulsion.
Vendors float schemes to compensate the high value of the product without
reducing the price.
Vendors prompt in honoring commitments...
Most vendors are very prompt in honoring commitments. The reimbursement of
schemes is mostly on time, barring a few exceptional cases, where the vendor has
a genuine reason to delay payment. In many cases, a little follow-up on the
dealer's part does the trick. The prompt reimbursement reflects vendors
commitment towards their partners. Therefore, they are very careful of
maintaining their reputation and market credibility. Also, vendors today are
making an effort to design simplistic schemes for the easy understanding of the
partners. More importantly, it is on the partner to make sure that he
understands the various clauses of the scheme before signing up for it.
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“Reimbur-
sement of schemes is mostly on time barring exceptional cases, where the vendor has a genuine reason to delay
payment”
-Bharat Bhushan
Director, RR Systems |
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Paperwork part of the game...
Managing paperwork is a part of any scheme program. Being regular in the
daily accounts helps. No doubt, schemes require a lot of accounts maintenance,
but this anomaly can be sorted out to some extent by doing a parallel working
and updating the paper work during the scheme period as all the details are
taken periodically to ensure the achievement of the target. Schemes are a good
way of vendors being known in the channel space.
Competition is the mainstay...
Schemes encourage everyone to bring down the prices, ultimately passing on
the price benefit to the end customer. Withstanding competition has its own
benefits too, in the form of attractive incentives. Schemes show value
proposition to the dealer in the form of gifts and foreign trips he gets by
selling more. These trips provide a common platform for the channel community to
interact and exchange their views informally with their team members, suppliers
and vendors.
Schemes motivate dealers...
The basic objective of schemes is to motivate the dealers / resellers to
sell more (push sales) and in return give some additional benefit, which cannot
be passed directly, thus maintaining the transfer price. Off late, the schemes
are also used as a tool to fight gray market, thus binding the dealers/
resellers. Schemes also educate the users the difference between gray market
stock and official stock by introducing promotional packs and freebies along
with the stocks.
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