Does your MSP suffer headaches providing hardware to clients?

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Piggy Bank looking at LaptopOne of the challenges that many IT Solution Providers and Managed Service Providers (MSP’s) often experience with some clients is around the fulfilment of hardware.

All clients regularly need hardware – be it new workstations, replacement servers, additional printers or any other office equipment – and so they naturally turn to their IT partner to advise them on the specification, make and model of equipment to buy. The IT partner happily provides this info, often as a quotation – and it’s at  this point where the challenge lies for many IT companies.

Typical Client Statements

Do any of these client statements ring true?

  • “Thanks for the quote, but I can get this cheaper on-line”.
  • “We bought this PC cheaper than the one you suggested, but it’s now saying Windows 7 Home Edition won’t connect to our domain?”
  • “How do we network this (cheap) printer we bought from eBay?”

Clients often think they’re being savvy by cutting you out of the equation and buying their own equipment – but it rarely ends well for them.

Educating the client

You can educate clients that they’d get better value from buying their hardware through you.

  • Charging Consultancy time for specifying hardware to the client.
  • Charging installation fees for new equipment.
  • Charging for your time spent dealing with Warranty work on any equipment not purchased directly from you.

This all helps the client to understand buying cheap hardware off their own back is a false economy.

By implementing these types of techniques, I’ve helped many MSP’s to turn the provision of loss making hardware sales into a profitable source of income.

Should you offer Credit Terms?

But then there’s the challenge that most clients seem to expect credit terms for hardware purchases. You’re taking a risk of non-payment by buying hardware on behalf of your client, but many MSP’s feel uncomfortable *not* offering Credit Terms.

(For more on this, read “Should my MSP offer Credit Terms on Hardware and Software?”).

This can be a difficult conversation for MSP’s to have with their clients.

Therefore in the face of all these challenges, and the low margins that is often available on hardware, it’s easy to see why many MSP’s consider Hardware purchases for clients a real headache.

Looking at an alternative

So it was with interest that I chatted with Brian Trevaskiss of IT Hardware distributor MoreFrom Group about their latest initative, MoreFrom.me

In a nutshell, MoreFrom.me allows IT companies to offer their own branded web-site courtesy of MoreFrom, offering selected products to their clients. The client uses the MoreFrom.me web-site directly, pays for the hardware themselves, alleviating the credit risk from the IT company, and MoreFrom also undertake the entire order processing and fulfilment of the hardware. MoreFrom then pay the IT company a referral fee of up to 13% for any purchases – meaning the IT company has reduced their headaches, but still made some profit.

I recently caught up with Brian to record a brief video chat with him about MoreFrom.me.

Can MoreFrom.me Help MSP’s?

For those MSP’s who have decided Hardware is nothing but a headache, I can see MoreFrom.Me providing a nice way to recommend products to clients, receive some income, yet mitigate the overheads and risk.

The Hardware Vendor market is a very tough one, with little margin to be made, so I applaud MoreFrom for offering an alternative solution to hard pressed IT companies.

I’ll be watching with interest to see how MoreFrom.me fares!

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