Seagate wants Direct sales!

Seagate cuts the heart from its Channel & Partner program with direct sales to volume buyers...

According to the New York Times article today, Seagate joins the Dell model in offering its products direct to large clients and in higher volumes than before.  Typically manufactures have sold to large web companies such as Google, Yahoo, Amazon direct but this is now expanding to other tech companies and even to investment banks as customers try to get more bang for their buck.

The problem is that like many traditional businesses, Seagate & Intel have built established and strong distribution partners and channel partners who have helped build some of these tech companies into the giants they are today.  The problem is now that the larger partners now have to worry if they spend time building relationships and educating larger clients on the benefits of using Seagate products the client can now be stolen by their supplier Seagate.

This is a major hassle for any company having to worry about losing sales to other channel partners now also have to worry about the supplier cutting them out as even once the channel partners offer a discount Seagate can still undercut their partners and sale the hard-drives at a profit.

Seagate Partner Program Benefits – North America

Bringing Added Value to System Builders, Resellers and Solution Providers. The Seagate Partner Program (SPP) is designed to help you set your business apart from the competition. SPP provides you with tools and resources to help increase customer satisfaction and lower your cost of doing business. As an SPP member, you can access an exclusive portfolio of benefits:
  1. Password protected website with valuable sales resources
  2. Exclusive special offers
  3. Dedicated pre-and-post sales support waiting to take your call
  4. Quarterly electronic newsletter – Storage Insider Magazine
  5. **Seagate reserves the right to contact your larger clients direct
Based on this recent news maybe Seagate Partner Program Benefits detailed above should be updated  to include a caveat 5**
What should a supplier do?
I have contacted a number of suppliers in the past direct, but you can recognise a good supplier when they refuse to deal with you outside their partner and even go further and price higher than their channel partners to make sure the sales funnel stays competitive.  The benefits of dealing with a channel partner is that they are the ones who offer the local support and training when required.
How the market is now, suppliers needs to make sure that their channel partners stay profitable and provide assistance and resources were required. Suppliers can often have a lot less patience but need to stand by their channel partners as they are the ones that will continue to grow their business into the future.

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