April 2010

Exploit Manufacturers Promotions

Saving Money on Networking Infrastructure
Tip #15: Exploit Manufacturers Promotions

By: David Mayberry, Go Communications Systems Ltd

How to gamble – with a hidden advantage
“Oh, I don’t bet. I’m not into gambling.” I’ve heard it a hundred times, my response? Bunk. We’re all gamblers to one extent or another. Standing at the roulette table or the race course with your last tenner staked is extreme, but day-in, day-out, we all gamble. And, let’s be honest, life would be pretty dull if we never took any risks, wouldn’t it?

A classic example of this is our reaction to sales promotions. When we see a ‘three for the price of two’ offer at the supermarket, we’re immediately weighing it up: “When will the offer end? How does the price work out per item? Is it worth buying six? Or nine? Have I got space to store them? Will I use them before they go off? What if the price comes down next week or there’s a different offer on?” We’re gambling. We’re assessing risk in order to decide which course of action to take.

Hone your skills
Gambling is a skill. And like any other skill, the more you exercise it, the better you get at it. Take a game like poker. There’s always an element of risk – it would hardly be gambling otherwise – but the more you play, the better you get at reading the game and judging the risks and opportunities.

So, what does this have to do with network equipment? Well, any network manager who’s been in the business for any length of time knows that setting up and maintaining a network is a game in which you can win, or lose. When you win – when you get a great deal on network equipment – the feeling of satisfaction and achievement is wonderful. Losing is less wonderful! When buying new network equipment devices or software, whether for a small extension to your existing network, or to set up an entirely new one, there are a number of angles to play to keep you ahead of the game. You have to gamble.

Play those angles right and stay ahead of the game and there are serious cost savings to be had.

The right time to buy
It’s vitally important to buy network equipment at the right time. That means any time when the manufacturer is running a sales promotion on the network equipment you need to buy. The wrong time to buy is when demand is high, stocks are low, or a new product is on the way but not out yet: at such times the manufacturer has no need to run sales promotions. Demand is high, and they will happily satisfy it at high prices. Sales promotions cost manufacturers money, and while they’re happy to bear that cost in return for a benefit – perhaps increased share in a particular sector or shifting excess stock, they won’t bear it when they don’t need to.

The other side of the coin, of course, is that sales promotions mean savings for you, the customer. To benefit it’s essential that you know, in advance, which network equipment products are most likely to be of interest to you, should they be available at promotional pricing in the future. That’s a matter of research – know what you need and you can snap it up when it’s offered at a reduced price.

Read your junk mail
You also need to be in direct contact with (and carefully watching) the outlets which provide the network equipment on your list. This is where junk mail should not be junked, at least not until you’ve checked it carefully for the network equipment you’re after. It’s a matter of knowing your network and watching the market – the equivalent of keeping an eye on the Racing Post or Sporting Life. Arm yourself with knowledge. Keep your finger on the networking pulse.

Finally, planning is all-important. Knowing the technologies that you will need for your network later this year and next will put you in a position to identify the network equipment that should be on your wish-list. When network equipment on your list comes up as special offers, you can allow yourself a pat on the back, but hold back any desire to leap in the air and whoop for a while longer. This is the point to keep a poker face and play it cool. If there’s a sales promotion on, there may be the potential for further discounts as well. Most manufacturers, when running a promotion, accept that there will be a few ‘low-ballers’ in the market, keeping additional discount in reserve for such customers. They’re playing the numbers game. While I wouldn’t get over-excited at the likelihood of additional discount on an order for one or two units, if you have a quantity order to place, you are exactly the sort of customer the manufacturer is looking for, and should make the most of it, pressing them for as substantial a discount as you can.

The golden rules
So, remember the golden rules of gambling on sales promotions. Know your network equipment and the technologies you’re going to need in the next year or so. Know the market – who sells what, at what price, including the network equipment on your wish list and any alternatives. Watch the suppliers, looking out for promotions on the products on your list. And be prepared to haggle hard for extra discount.

Go on. Have a flutter.