3 ways to increase your channel sales via the OEM channel

July 21, 2009

In my last post we discussed ways to maximize your sales via the OEM distribution channel. In this article we’ll look at three ways that you can increase your channel sales (i.e., retail, VAR) through leveraging the OEM software distribution model.

For some companies. their only distribution channel is OEM.  But  many companies, depending on their strategy, utilize multiple distribution channels, the principle ones being the two tiered distribution channel (i.e., “the channel”), direct sales and OEM.  At some juncture discussions about channel conflict will arise.  For instance, if we’re selling our XYZ product direct, what will resellers say when they lose sales to our own sales reps?  Likewise, if we’re OEMing our XYZ product, i.e., selling it at a sharp discount and distributing it through a partner’s product/distrubution channel, will that sale result in a lost sale at retail?

Invariably these questions will arise, and answers can be found through a number of ways, including close monitoring of sell through reports.  

If you are distributing, or are considering distributing, one or more of your products through the OEM channel, there is likely a good reason for it.  That said, it pays to look at your channel strategy in total and try and maximize each channel as well as the sum of all of your channels.

Here are three ways to increase not only your OEM sales, but retail sales at the same time.  

1) Offer the end user a simple and compelling upgrade/cross-grade path to drive incremental revenue.  The upgrade could either be fulfilled by you, with a potential revenue share to your OEM partner, or fulfilled by your OEM partner.  One example would be Corel’s Painter (TM) product.  Corel bundles and entry version of this product, Painter (TM) Essentials with various partners and allows the end users to get a discount when they purchase the full version of Painter (TM).

2) Include a try & die version with a bundle partner (with the same fulfillment options as above), or better yet, bundle a paid version of your product, but on the same disc have a second product that is a try & die version.  Typically these try and die versions give end users 30 days to try it, they can then purchase an unlock code either through the OEM or the manufacturer.  In many companies, the OEM revenue goes in one bucket, why the “upgrade” or “upsell” revenue, could be considered a “retail” sale.  Obviously, this depends on your company’s accounting practices.  In the case of Corel, as an example, they could decide to include a try & die version of CorelDRAW® with their  Painter (TM) Essentials OEM product.

3) Do an in-box promotion for one of your products that is only sold at retail.  One advantage of distributing through OEMs is achieving broad distribution that you otherwise would be unlikely to achieve.  Sticking to the examples above, Corel could decide to provide a special offer to Painter (TM) Essentials users.  For example, users could take a coupon into a retail store and get a discount off of a higher end product, such as CorelDRAW® or one of their other graphics products.  The coupon could also be redeemed online.

The above are only a few examples of ways you can distribute through the OEM channel and still allow your other sales channels to flourish.

Stay tuned for more informative articles on how to maximize your sales through the OEM channel.  And as always, I welcome your comments and questions.

Bruce Chandler

www.mbrucechandler.com

 

www.brucechandler.wordpress.com

 

bruce-1

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