B2B Tech Talk with Ingram Micro
B2B Tech Talk with Ingram Micro

Episode · 2 months ago

How a reseller can use financing to help grow their business

ABOUT THIS EPISODE

Tight budgets make it difficult for businesses to purchase the solutions they need when they need them.  

The solution: create the opportunity for flexible payments. A business may not be able to afford the entire product upfront, but they can build a monthly payment into their budget.  

Ingram Micro is helping make this a reality for partners.   

Shelby Skrhak speaks with Scott Pecnik, chief executive officer at PacGenesis, and Jeremy Covert, financial solutions executive at Ingram Micro, about: 

  • The challenge of budgetary constraints for businesses 
  • Ingram Micro’s financing solution 
  • Where technology is headed in the next year      

To join the discussion, follow us on Twitter @IngramTechSol #B2BTechTalk 

Listen to this episode and more like it by subscribing to B2B Tech Talk on Spotify,Apple Podcasts or Stitcher. Or tune in on our website.

You're listening to B two B tech talk with Ingram Micro, the place to learn about new technology and technological advances before they become mainstream. This podcast is sponsored by Ingram Micro's imagine next. It's not about the destination, it's about going someplace you never thought possible. Go to imagine next, DOT INGRAM MICRO DOT com to find out more. Let's get into it. Welcome to B two B tech talk with Ingram micro. I'm your host, Shelby Scare Hawk, and our guest today our Scott Pactnett, CEO of pact Genesis, and Jeremy, covert financial solutions executive with Ingram micro. Scott and Jeremy, welcome. Thank you, shelby, for having us. Thank you having to be here. Well, excellent. So today we are talking about how a reseller can use financing to help grow their business, but I guess first off let's do some a little bit more in depth introduction. So, Scott, tell us about PAC genesis and and what led you to founding the company. Sure you know, for me I kind of always wanted to be an entrepreneur, to start a business. It was sort of always in the back of my mind, and so when I graduated from college, I kind of just started taking the steps to to get there. I left IBM, I went to work for an IBM business partner, which ended up kind of being the model for PAC genesis, which was a software reseller and consultancy. And on the way I moved to Austin, Texas, which is kind of has this thriving startup scene and all this venture capitalist money and all these fun, cool companies and in my wisdom, I decided to to build a business that was kind of the antithesis of that, which is a little bit boring. It's not sexy, it's B two B and it's IBM business partner, but it's something that, you know, to me I felt like I could do on my own. Didn't need to borrow money, I could bootstrap it kind of the old fashioned way. So I that's what I did. I leveraged a consulting contract and kind of started to build up a balance sheet and, you know,...

...hired an employee and and sort of just went down that path and here we are eleven years later. Yeah, that's amazing. So, Scott, I mean you mentioned boots trapping the business, but you know, tell us about some of your early pain points that you faced. Yeah, I think you know, most of our early pain points aren't, you know, two different than than others in our shoes. It was a, you know, B two B business focus heavily as an IBM business partner. So our our customers are banks, insurance companies and, you know, getting our name out there and and some credibility was was tough. You Know, we leveraged my experience as being a former developer for an IBM product. That's kind of how we went to market and for the first six or so years about eighty percent of our revenue was consulting and not software resell and in is when we really, you know, figured that part out and get a foothold. And that's where, you know, some of these credit issues that we're going to talk about and how Jeremy and his team have helped us solve have helped us to to really get exponential growth. Well. So, you know, Jeremy for a listen. Or who might be like Scott who launched a business with similar pain points or challenges? I guess let's start from the broad picture. What can ingram micro do for them? Then, you know, that's great question. Shall be you know, every day I'm speaking with partners just like Scott and you know, one of the greatest challenges facing their customers is not technological, it's financial. You know, with today's competing capital markets and tight budgets, it makes it difficult for businesses to purchase the solutions they need when they need them. So partners are looking for ways of leveraging our fectible payment solutions to help, you know, sell against budgetary constraints, along with increasing the customers purchasing power to help drive incremental cells. You know, we actually just conducted a recent survey where we we surveyed customers and six or eight percent of those customers that were surveyed basically said that the availability of leasing and financing was important to their part their selection process. And today's market it's become more and...

...more what fits into their monthly payment or annual payment and less about the total solution costs, you know. And when partners offer a payment option along with the total solution cost, they're increasing their probability to win by more likely to close the deal. Right. That's correct. So one of the other issues that we're always discussing with partners is about how to manage their terms line cash flow and D s o. When customers are financing they usually get paid within five days, compared to a standard D s o or payment terms from their customer can rage anywhere from sixty to sixty five days. So for a company like Scott's or other companies similar to him, that's able to help them manage that cash flow. Their terms line with Ingram micro and, just you know, their D s o dramatically decreases as well. So that's an extremely important thing to a lot of partners and that's one thing that we're able to vide over here at Ingram micro financial solutions. Well. So, Scott Uh, if you will tell us kind of specifically how you work with Ingram Micro, I mean a little bit of the process and how early or or late do you bring in the financial services team or financial solutions team? I think we're a bit unique kind of within we'll call it the Var community, which is value added resellers who work with Ingram Micro, and we're pretty self sufficient. All of our sellers are are very well versed and financing and it's a it's a part of every sale. Like I said, we kind of didn't really start to ramp up our resell business until or so and I think our second or third deal that year was a finance deal and from there we saw the power of wow, this can really help us close business, this can help us close bigger deals as well. And so, and just knowing Jeremy and his team and how great they are, you know, we bring them in and then we figure out, you know, what kind of rate are we gonna get and what's the best how can we close this deal together? And it truly is a partnership. Well, so I wonder if you can expand...

...a little bit on that, Jeremy, about the interest rates and I guess some of those those specific concerns that business owners and resellers would have in trying to get a deal locked in. Well, I mean, I think what we try to talk to all of our partners about is less about selling an interest rate and more about selling a payment to their customer. You know more and more every day you go onto a website and you buy stuff or your own you know, consumer purchases. You get to the end where it's time to check out and buy that solution and you're always able to see, hey, what's this going to cost me? From a cash perspective or, you know what, are some other payment alternatives that are available out there, and by leveraging that type of model with your customers, you're going to help focus their mind the correct way from a financial perspective instead of them seeing this big barrier of Oh my God, that's going to cost me x amount of dollars so or it's going to cause me this amount in my monthly budget, which is something that we can actually itemize out and do and that's something we can easily afford. So that's really what we're selling more is a flexible option of a way for a customer to pay for a solution. So financing, I mean, do you find them? And you know this has been our topic here, but I guess how much of a barrier can financing be for for a business? And I guess just can we talk a little bit more specifically about why? Because what I think our our listeners would want is to hear themselves like, okay, yes, that's the that's the issue on basic right now. And so how can ingram micro really really fix the specific you know, the things that keep you up at night? Well, I think you know one of the barriers that a lot of partners probably see is how do I offer financing and where do I go to offer financing? WHO's the best funding partner out there for my customers, where Ingram micro financial solutions is kind of gay of all of our partners that turn key solutions. So what we've...

...done is we've worked and formed relationships with some really good partners out there that are able to provide, you know, competitive rates, terms, deferral options, whatever their customer needs we're able to provide to them. So that's what I kind of look at is we've taken away that barrier and now we're giving them opportunities to grow their business and with them, you know, leveraging Ingram micro financial solutions now as part of their distribution, they also have this financial arm that they can actually go out and help drive and close more business. So, Scott, if we're looking at that thirty foot view, why would you say it's a partnership and success to work with Ingram Micro Financial Services and solutions? I think just because it's easy, like any relationship. You know, when you meet somebody and things are easy, you know it's it's probably right and it's easy to work with. What Jeremy and his team and he gets it. He's been in this financing world for, I think, his whole career, you know, and I think just to go back to to your question earlier to Jeremy, is they're kind of two categories of customers that we come across. There's the big companies that have the balance sheet but they still want payment terms for whatever reason, and then we come across smaller companies that are more like us, that are startups, that truly need the software in order to build and grow their business and but they don't have the cash on hand. So it feels kind of good to be able to, you know, call someone like Jeremy and be able to provide them solution, because that ends up, I guess, in the IT elevates certainly your position as a leader as a solution. I think that's that's probably a pretty good point that, you know, being able to to have, you know, not just the technology that you need but the financial solution to, you know, to those challenges, that can really set you apart from others. Right. Yeah, and everybody wins in that scenario. You know, the customer may have may have went at the competitive solution or may have not been able to,...

...you know, acquire, you know, a set of new customers because they don't have the solution and so being able to provide them with the technical solution but also the financial solution to help them grow their businesses is pretty satisfying well. So as we do start to wrap up our episode, we always ask our guests the same final question and that's where do you see technology going in the next year? So I know that's broad, but we can go broad with our answers. So, Jeremy, I'm gonna Start with you. Where do you see technology going in the next year? Well, definitely see, you know, more of a cloud focus, you know, coming in regards to you know, over the next five years. But I also still feel that there's going to be, you know, equipment that's needed to finance as well. But we're trying to see. What we're seeing more and more with equipment is people just trying to get the useful life of that equipment and take advantage of only paying for that useful life. So one of the great products that we have over eating our micro financials alutions are is our technology refresh program where this allows your customer to stay in the latest and greatest technology. You know, it used to be where you're able to go get a PC and keep that for five, six, seven, eight years and be able to leverage that. And now what we're finding is people just want to be in that latest and greatest technology for three years and then go into the latest. And for you as a partner, this is a great option as well because it keeps that relationship with your customer. So you know, in three years from now or two years, however you set the term, you have another solution that you can go back and sell to your customer and I know Scott Es lies that a lot on our software, you know, financing that we do where he has the ability of based off of the term that we finance with him in the past, to go back to him, you know, at the end of that term and say hey, look, we finance that product, you know, three years ago. Let's get you into the latest and greatest or, you know, continue with your license that you currently have and let's finance that again. So then, from a end user customer...

...perspective, they know exactly what they're paying for for their technology solution and I think that's something that we see growing and growing in our space. The other thing we're seeing two is is in large to consumption financing, where we can actually base the payment based off of how much you're consuming, especially this is great data centers and stuff like that, to where we can actually leverage based off of how much you know, it may be based off of how much storage or how much usage that's being used. We can kind of structure that payment very similar to a utility style payment. Scott, how about you? I think I'll take an out and I'll answer that question from the perspective of financing because, you know, it's like it's like anything else. Nobody knows and we'd be in a different place. But you know, I think that, you know, rates going up and things like that. I think that financing is still going to be a big part of the future. You know, for us, one of the things that we're able to do with financing is grow the side of a deal and that benefits both us and our end user. Jeremy mentioned, you know, multi year deals. We're able to go into a customer and when we saw a larger quantity, maybe we can get a better discount or better pricing from the vendor, and bringing in financing allows us to smooth out those payments and then they have predictable, you know, account payable. So I think that that's still going to be important. I think it's going to be a big driver. Given that, you know, maybe things will kind of slow down a little bit. I think people might be a little bit more cost conscious. I think that with money being so cheap for so long, there were lots of consolidation, lots of, at least our customers, buying each other, and now they're going to look at their portfolio products and say, well, we why don't we consolidate? This? Looks like we both own the same licenses, and so that will lend itself to, you know, maybe bigger deals, more at the organizational level instead of selling to smaller groups individually. And I think financing will be a big part of that. It's gonna be very important going forward well. And and just piggy backing off of that as well. You know, with...

...rates going up, cash is going to be keen for a lot of customers. So, you know, leveraging financing is going to be more important than ever. And you know, in that glaring statistic I've provided earlier, you know, sixty eight percent of customers are selecting their partner based off of them having a financial solution. So don't allow, you know, financing to be a reason why you don't win an opportunity. Financing is going to be extremely important, especially going forward. Well, Jeremy, for listeners who wanted to find out more about what we talked about today or have any questions, how can they reach out? Yeah, so you can actually reach out to our financial solutions team. We have six dedicated financial solutions executives, just like myself, that are assigned to certain business units, um internally at Ingram micro or based off of their territory, and we're able here to provide the same turn keen solution Um, no matter the partner, no matter the solution. So, yeah, all they have to do is just email us at financial solutions at Ingram micro dot com. We'd love to set up at ten, fifteen minute, thirty minute conversation kind of see exactly what's going on at your company and see how we can structure our financial solutions the match exactly what your customers are needing. Excellent. Well, Scott Jeremy, I appreciate your your time and your insight today. Thanks so much for joining me. Thank you, shelby. Thanks for having US and thank you listeners for tuning in and subscribing to B two B tech talk with Ingram micro. If you liked this episode or have a question, please join the discussion on twitter with the Hashtag B two B Tech Talk. Until next time, I'm shelby scare talk. You've been listening to B two B tech talk with Ingram micro. This episode was sponsored by Ingram Micro's imagine next. B Two B tech talk is a joint production with sweet fish media and Ingram micro. Ingram micro production handled by Laura Burton and Christine Fan. To not miss an episode, subscribe today on your favorite podcast platform.

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