Crest Systems is a Value Added Reseller (VAR) and a brand new company. The company is focused on marketing speciality inventory software products to over 1,200 VARs that sell in vertical markets. Each market is unique and serves a speciality industry. In addition to the software, Crest will sell the inventory data collection hardware that will operate the software. VARs that sell to vertical markets have traditionally focused on the specific product or service of their industry. Even though their customers need inventory controls, these VARs still haven’t had a product to offer them until now.
A customer must be able to purchase an inventory management solution at a cost of less than $5,000 to ensure product success. Crest Systems has signed a strategic alliance agreement with Promerit Engineering to sell its software products through these VARs. Promerit Inventory Basic, which will be released in May, is the first product. Crest Systems projects sales of 20,000 units in 36 months. The product will be available for purchase at $850
From the sale, the VAR will be paid $400 Crest Systems will receive $250 per 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 price per unit will range from $2,000 to $3,000. Crest Systems receives between $600 and $900 for each unit. The total package of software and hardware will be less than $5,000.
The company is primarily focused on vertical markets but VARs who are warehouse managers may be interested in a low end data collection solution. Crest Systems will put together 1,000 VARs who manage warehouses and sell Promerit Inventory Basic.
Crest Systems will also develop specialty software modules that can be integrated with Promerit Inventory Basic software. These modules are expected to retail at $800 to $1,000. Crest Systems will continue to build strong business relationships with VARs to enable them to offer additional software or hardware products.
Crest System founder Richard Torres is a veteran of selling to vertical markets for over 12 years. He was Cycon Systems’ top salesperson, with over $3M in sales last year.
1.1 Objectives
Crest Systems’ objectives are:
- In the first year, we sold 8,000 units.
- It is crucial to build strong relationships with VARs in order to increase sales.
- Each year, increase the sales of software modules by 15%
- Promerit Systems should be in constant communication to ensure customer satisfaction and product quality.
1.2 Keys to Success
Crest Systems’ success is dependent on these key factors:
- Inventory control solutions for less than $5,000
- Rapid and reliable response to questions and other requests from VARs
- 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.
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