Channel Programs, Featured Post

Partners to Vendors: You’re SKUing Us to Death

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SKUIt’s always fun to hear a new channel chief say that a top priority is making it easier for partners to do business with a vendor.

My typical retort is something about how much I want clean air and water, sun-drenched vacations and apple pie for dessert.

“Ease of doing business” is a catchall phrase vendors use when talking about doing better by their partners. This translates into vendors deploying more channel field support, creating new programs with a bevy of incentives and, of course, changing the partner portal for solution providers to more easily find and access resources.

A problem that rarely gets addressed is SKUs. You know, the standard, run-of-the-mill stock keeping unit. What’s the problem? There’s just too many of them.

Solution providers tell Channelnomics vendors are blissfully unaware of SKU proliferation and the problems it cause for partners. While a vendor may offer a few baseline products, their variations can number in the dozens — each with a unique SKU, which makes it exponentially difficult to identify the right product.

Why so many SKUs? They’re not entirely unjustified or unneeded.

A single product could have multiple versions based on features, language and capacity. The language issue alone can create dozens of versions. It seems simple to just have language as an option in the basic product, but that doesn’t allow the vendor to track products deployed.

Compounding the SKU issue are add-on applications. APIs, connectors and enhancement tools that are required to make many applications work with legacy applications and IT infrastructure don’t just double the baseline number of SKUs, but have the same geometric SKU proliferation problem as the base product.

When it comes to hardware, vendors can field multiple products that look exactly alike on the surface. Inside, though, they’ll have different memory, storage, processors, ports, screen resolutions, etc. Each variation means a different SKU. Think about every network and security vendor in the market; nearly every product line has five basic models to meet the different classes of customers. Funny thing: Each model has a handful of variations.

SKUs are particularly interesting with consumer products. How do all the big-box retailers offer competitive pricing guarantees? No two retailers carry the exact same product. What’s advertised at Best Buy may look like the PC sold at Walmart, but discrete differences mean they’re not the same. They both have different SKUs, by design.

Solution providers say SKU proliferation is a huge headache. Selecting the right products to meet a customer’s needs isn’t all that simple because it requires sorting through a mountain of SKUs to identify the right product for the job. Further complicating the process: mining SKU Mountain for all of the complementary and add-on products required to make a complete system or comprehensive sale.

The blowback from the SKU problem is cost. It costs solution providers in staffing, training and other resources to adequately manage the SKU problem. It costs vendors in pre-sales support, as solution providers rely on vendors to sort through the SKUs. And it costs solution providers and vendors in sales; the SKU problem means solution providers follow Occam’s Razor and seek the simplest solution to their problem, which means they often avoid certain vendors and products because sourcing is too difficult.

If vendors want to get serious about addressing the “ease of doing business,” they need to address the SKU problem. Until they do, solution providers in the channel will get SKU’d to death.