Crest Systems is a new Value Added Reseller (VAR). The company is focused on marketing speciality inventory software products to over 1,200 VARs that sell in vertical markets. Each market is distinct and serves a particular speciality industry. In addition to the software, Crest will sell the inventory data collection hardware that will operate the software. Traditionally, VARs who sell to these vertical markets focus solely on the industry's unique product line or service. Though their customers have inventory controls needs, these VARs have not had a product they could offer until now.
Critical to the product's success is the ability to sell the customer an inventory management solution that costs less than $5,000. Crest Systems has signed a strategic alliance agreement with Promerit Engineering to sell its software products through these VARs. The first product is Promerit Inventory Basic and will be released in May. Crest Systems projects sales of 20,000 units in 36 months. The product will sell for $850.
The VAR will receive $400 from the sale. Crest Systems will receive $250 on the sale of each unit. Crest Systems will also sell hardware that will use the software. Crest Systems will sell portable data collection units from Symbol and PSC. The cost of the hardware will be between $2,000 to $3,200 per unit. Crest Systems receives between $600 - $900 on each unit. The total package of software and hardware will be less than $5,000.
Though the company is focused on the vertical markets, VARs who sell warehouse are also interested in a low-end data collection solution. Crest Systems will assemble 1,000 plus warehouse management VARs to sell Promerit Inventory Basic.
Crest Systems will also develop specialty software modules that can be integrated with Promerit Inventory Basic software. These modules will sell for $800 to $1,000. Crest Systems plans to solidify a strong business relationship with its VARs customers that will lead to providing additional software and hardware products.
Richard Torres, owner of Crest System, has over twelve years of experience selling to vertical markets. Last year, he was Cycon Systems top salesperson with over $3 million in sales.
The objectives of Crest Systems are to:
- Sell 8,000 units during the first year.
- Establish strong relationships with the VARs critical to sales.
- Build the software module business by 15% each year.
- Maintain effective communication with Promerit Systems in order to improve product quality and customer satisfaction.
1.2 Keys to Success
The keys to success in Crest Systems are:
- Offering inexpensive inventory control solutions that cost less than $5,000 to implement.
- Reliable and timely response to VARs' questions and requests.
- A reliable administration that is ready to serve VARs, prepare accurate billing, follow-up on orders and other documentation, and maintain a close watch on expenses and collection of accounts receivable.