You found the hardware. It’s available, the lead time works, and everything about the solution seems to line up—until you see the price.

Maybe manufacturer pricing has increased. Maybe available inventory is limited. Maybe your customer already has a competing quote that’s difficult to match. Whatever the reason, the economics of the deal suddenly don’t look nearly as attractive as they did when the opportunity started.

For a VAR or MSP, that can create an uncomfortable choice: reduce your margin to keep the quote competitive, present the higher price and hope the customer accepts it, or risk losing the opportunity.

Before choosing among those options, however, there’s another question worth asking:

Have you checked another source?

Availability Isn’t the Only Reason to Source Differently

Alternative sourcing is often associated with hard-to-find or discontinued equipment, and that’s certainly one reason to use it. But hardware doesn’t have to be unavailable for another sourcing option to make sense.

Sometimes the issue is simply economics.

The same product can exist in different places throughout the technology supply chain at different acquisition costs. Excess inventory, overstock, cancelled projects, inventory repositioning, and other market conditions can occasionally create pricing opportunities that aren’t reflected through conventional distribution channels.

That doesn’t mean the open market will always be less expensive. Authorized distribution may still provide the best price and overall value.

The point is that when the numbers aren’t working, there may be another market worth checking before deciding the deal can’t work.

Protecting the Deal Without Giving Away the Margin

When a customer pushes back on price, resellers face a familiar dilemma: how much margin are you willing to sacrifice to win the business?

A few points disappear to make the quote more competitive. Then a few more may be needed to match another offer. Eventually, the reseller can find itself winning an order at a margin that makes the victory considerably less attractive.

That’s particularly frustrating when the customer isn’t objecting to the solution itself. They want the hardware and may already have approval for the project. The only obstacle is the number at the bottom of the quote.

Before reducing the selling price, it can be worth investigating whether there’s an opportunity to change the acquisition cost instead.

Hardware Pricing Doesn’t Exist in a Vacuum

Enterprise hardware moves through a large and constantly changing global supply chain. Manufacturers, distributors, resellers, integrators, leasing companies, enterprises, logistics providers, and independent suppliers all participate in that ecosystem, and inventory moves throughout it for many different reasons.

A large deployment gets cancelled. A company purchases more equipment than it ultimately needs. An organization refreshes infrastructure earlier than expected. A supplier is carrying excess inventory it wants to move. A manufacturer transitions to a newer generation while unused previous-generation equipment remains elsewhere in the market.

Situations like these can create pockets of available inventory with economics that look different from standard channel pricing.

The challenge is finding that inventory and working with a source you can trust.

Not Every Opportunity Belongs in the Open Market

Alternative sourcing shouldn’t become an automatic response to every quote. Authorized distribution remains the right sourcing path for a tremendous amount of enterprise hardware and frequently offers the best combination of pricing, availability, manufacturer programs, incentives, financing, and support.

The objective isn’t to bypass those relationships. It’s to recognize situations where checking another source may be worthwhile.

Those situations might include:

  • The customer’s target price is substantially below your current acquisition cost.
  • A competitive quote is putting significant pressure on your margin.
  • The requested equipment is an older generation.
  • A quantity requirement creates an opportunity to search for excess inventory.
  • The customer is open to professionally refurbished equipment.
  • The product is approaching or has reached End of Sale.
  • Standard channel pricing has changed enough to threaten the project.

In those situations, another pricing check can provide useful information even if you ultimately purchase through your normal distributor.

Condition Can Change the Economics Too

Not every customer or application requires factory-new equipment. For the right project, professionally refurbished enterprise hardware can provide another way to improve the economics while still meeting the customer’s technical requirements.

Lab and development environments, disaster recovery sites, replacement spares, temporary deployments, budget-constrained expansions, and existing environments built around older-generation hardware can all present situations where refurbished equipment is worth considering.

Even in production environments, refurbished equipment may be appropriate when the customer understands the sourcing, condition, and warranty parameters and the equipment satisfies the organization’s requirements.

The point isn’t to push customers toward refurbished equipment. It’s to recognize that new isn’t necessarily the only condition worth evaluating.

Change the Acquisition Cost Before You Change the Margin

Suppose your original quote comes in above the customer’s budget. Instead of immediately discounting it, there may be value in taking another look at the supply side of the transaction.

You might tell the customer:

“We’re taking another look at the pricing before we finalize this. We may have some additional sourcing options available, so let us check the market and see if there’s another way to improve the economics.”

Maybe SmartSource IT finds the same equipment at a better acquisition cost. Maybe there’s excess inventory available. Maybe previous-generation or professionally refurbished equipment gives the customer another viable option.

Or maybe your original distributor quote remains the best choice.

That’s useful information too, because you’ve explored the alternatives before deciding that reducing margin is the only way to make the deal more competitive.

Check the Market Before You Requote

Price pressure is part of selling technology. Customers can compare quotes quickly, procurement teams negotiate aggressively, and VARs and MSPs are continually balancing the need to remain competitive with the need to protect already-thin margins.

Alternative sourcing won’t solve every pricing challenge, and it won’t always produce a lower acquisition cost. But when the numbers are threatening an otherwise viable hardware opportunity, another sourcing check can provide an option that might not have been visible through the original quote.

Before lowering your price, check the market.

There may be another way to make the numbers work.

Check Another Source Before You Requote

SmartSource IT helps VARs, MSPs, and IT resellers source enterprise networking, server, and storage hardware through alternate supply channels.

If pricing or availability is making a hardware opportunity difficult to close, send us the manufacturer, part number, quantity, and required condition. We’ll check available sourcing options and help you determine whether there’s another path to the deal.

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