Predicting future technology trends will never be an exact science, but a distributor can help VARs eliminate the guesswork.

But life as a reseller isn't that easy. You actually have to summon all your business brainpower to anticipate technology trends instead of simply gazing into a glowing orb. But the next best thing to a crystal ball could be partnering with your product distributor. They work with trend-setting vendors and VARs from various vertical markets. You can use your distributor's experience and services to help you anticipate which new technologies to add to your product line.

The Hottest Technology: Wireless

In 2004, expect increased demand for everything connected with wireless technology (pun intended). "It's all about being mobile," says Jonathan Elster, senior VP of sales and marketing for computer and wireless technology distributor SED International (Tucker, GA). "More and more people refuse to be tied to their desk. We're just seeing the beginning of the emergence of wireless technologies."

Even better news for VARs is that wireless technology creates the need for other related technology to be installed. You can't just sell a half dozen wireless handhelds to your customer and install a handful of access points in its warehouse. Software, data storage, data backup, and security will be necessary add-ons.

Jim Markisohn, VP of business development for distributor Arrow Electronics (Englewood, CA), says wireless applications need extensive support. "I can't think of a single application where back end computing is unnecessary - besides your garage door opener," he says. "Greater adoption of new wireless products will spark other growth in computing. There are significant storage needs and software that come along for the ride."

How Do You Determine Which New Technologies To Sell?

You might think it's perfectly logical to surf the Internet, flip through catalogs, visit trade shows, and read trade magazines to learn about emerging technologies. Those sources might tell you what's new and what's neat, but they can't definitively say, "Your customers will buy this new technology." The only source for that information is your customers.

Robert Barnhill, chairman, president, and CEO of communication technology distributor TESSCO Technologies (Hunt Valley, MD), says VARs shouldn't be product experts. Instead, they need to be customer-application experts and customer-need definers. "The VAR has the relationship with the customer, so their role should be to understand what the customer is trying to accomplish," says Barnhill. "The VAR, with help from their distributor, has to make sure the customer is getting not just a popular technology but the solution that will best solve their problem."

SED's Elster agrees, noting that VARs have to forge tight relationships with both the customer and distributor to achieve the best results. "Profile your customers. See what they're looking for," Elster says. "When you understand their needs and problems, you've created a selling opportunity. Once you do that, you should call your distributor to talk about which technologies and which products can solve those problems. Also, the distributor knows how the product's vendor works and can get you in touch with the person who will answer your questions immediately."

Additionally, distributors can provide VARs with insight (and sales leads) concerning an emerging technology. "We tell our VARs what's hot on the market - what end users and other VARs have a big demand for," says Aaron Savy, VP of sales at wireless technology distributor Winncom Technologies (Solon, OH). "We determine if there's a need for the product based on the number of leads it's generated."

Arrow's Markisohn concurs: "The reseller needs to look one step up the food chain and ask, 'Is the distributor hearing about this demand from anybody else? Is the distributor developing a training program around this technology? Are reseller peers selling it?' If the answers are 'no,' it might be a non-revenue producing product."

The distributor can also give resellers the inside scoop on the vendor of the new technology. "Even if the technology is sound and marketable, the VAR needs to know if the vendor is financially viable," says TESSCO's Barnhill. "You have to make sure these companies are going to be around next year to support their product."

VAR Mistakes With Emerging Technologies

VARs often commit cost-oriented errors when adopting a new technology. Some VARs shop for the best price per unit and build up a stock of solutions they may never sell. "Sometimes a reseller needs 5 of a certain product, but they buy 10 because the manufacturer offers them a better price," says Barnhill. "But if the technology becomes obsolete or a new version is released before the VAR sells it, they lose those cost savings and hurt their profitability."

Resellers also can underestimate the total investment they will have to make for a new technology. "The direct cost is more obvious," says Markisohn. "VARs know they need to train their salespeople and their engineers about the new products. But there's also the 'opportunity cost.' Did my best tech person have to focus on this new technology, causing us to take our eyes off our core product line and core customers? Don't get blinded by an opportunity."

Jumping into a new technology too quickly is another common mistake. Many distributors offer product evaluation programs to their resellers. "Don't just listen to a salesperson or read about the technology on the Internet," says SED's Elster. "Get the product in your hands for 30 days, get some training, and see exactly what it does."

That's about as close as you can get to predicting the future, especially in the IT world. Feel free to play with a Ouija board or call a psychic. But your time and money would be better spent learning about emerging technologies from your distributor.