In May 2000, Epicor mandated that resellers who handle its e by Epicor line must exclusively sell Epicor products. Since then, the Irvine, Calif.-based software company has lost 40 percent of its original dealer base.
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Perhaps it is no surprise that Epicor reversed its policy early this year. Why the switch? Some might believe it is because of the drop in Epicor’s revenue, particularly from new license sales.
In addition, the sale of the lower-end Platinum for Windows financial application to its competitor, Sage Software, meant the loss of another 122 resellers worldwide and about 5,600 clients. Epicor’s channel was getting pretty thin.
However, Mary Ann Burns, director of channel marketing, says the company previously believed that most VARs did not have the ability to sell multiple products. Now, a number of larger resellers have emerged with the right mix of services to handle competing applications, she says. And Epicor itself has been busy putting together programs to support resellers.
“Over the past year and a half, we had been busy launching new programs. Now that they are in place, we can support the channel,” she says. “By moving to an open channel, we have put all the pieces of the puzzle together and feel good about the move into 2002.”
Currently, Epicor has 100 partners in the United States, about 60 of which are resellers. Partners are broken down into two groupsÑAuthorized Consultants, who work with VARs and customers offering implementation and consulting services, and traditional VARs. Although Epicor is recruiting, the company is not seeking droves of new resellers.
“We are focusing on recruiting large system integrators selling to the mid-market. Right now, we want quality, not quantity,” says Burns. The company also wants resellers who will be able to work with the Microsoft .Net environment, as products based on that platform increase their market share.
Atlanta, Ga.-based Emerald Consulting is pleased with Epicor’s switch to an open channel. Cherry Gray Williamson, partner and cofounder, has been working with Epicor since 1989 and was disappointed when Epicor made its loyalty demands. Williamson’s firm was formed last year after its four cofounders regrouped the staff of the Atlanta office of the failed Sornson & Associates. Because of the loyalty edict, Sornson’s Atlanta office dropped Epicor products after six years of reselling, even though it had been successful supporting e by Epicor and Platinum for Windows. “The economy and business wasn’t at its highest point when Epicor made the exclusivity decision, and we needed to have a multi-product suite,” says Williamson.
In order to become an Epicor VAR, resellers must have at least $10 million in annual revenue, two to three years’ experience selling comparable applications, three customer references, and a business plan with a sales and marketing strategy. VARs must also employ a staff accountant, a salesperson with mid-market sales experience, and staff with Microsoft NT, SQ Server, and Site Server Commerce certifications.
In return, new partners receive a Partner Welcome Kit to help sell and market Epicor products. The kit includes a working copy of the software for demonstrations and for running the VAR’s business. Resellers also gain access to a secured Web site that provides them with information about partner program policies and procedures, along with new sales and marketing tools and templates. Training certificates for certification classes, interactive multimedia brochures, and a product literature library kit are also included.
Partners must be trained and certified on each product they resell. The program now allows each partner to choose between sending staff to the regular customer classes or the accelerated classes specifically created for Epicor partners. Partners must complete several days of classroom training, and pass a financial exam covering general ledger, multi currency, accounts payable, accounts receivable, and asset management. A Distribution exam is optional, but required for eDistribution resale.
Also, important in the education of Epicor partners is eLearning. “eLearning is Web-based training to assist in providing extensive training on our product line to our partners worldwide,” says Burns. ELearning was developed to meet on-going requirements and includes 35 courses and 65 classes. Plus, eLearning sessions are available on CD.
With the new channel program comes new margins, which range from 30 percent to 60 percent of list price. All new VARs start at a 40-percent margin for two complete fiscal quarters. Margins will then be adjusted to reflect actual sales for the previous two quarters. Margins are based on a rolling 12-month period of actual sales for the previous four quarters and are adjusted quarterly.
Furthermore, Epicor has created a new-name accelerator program to reward VARs with additional margin when they add new customers. The number of new-named customers is also based on a rolling 12-month period.
Williamson is excited to be supporting e by Epicor again. Currently, Emerald Consulting services and supports over 25 clients using e by Epicor. (VARs who stopped selling Epicor were allowed to provide consulting services to existing sites.)
“They have always had a good product. Being an early adopter of SQL, Epicor’s back-office suite has a mature, feature-rich offering. They have also developed a marketing portal for turnkey advertising and direct mail,” she adds.
In addition, Williamson says, “Epicor has reopened the VAR channel with a very attractive margin schedule, allowing us to make a good profit on the sale of the software. If we hit all of our goals, we can reach 60-percent margins.
Resellers can also gain rewards for performance in a number of areas including annual sales achievement and participation in selected programs. The performance levels are divided into three categories: Premier Gold, Gold, and Certified. Premier Gold partners must have $249,000 annual net license revenue, and either be part of the ESP program or the Vertical Market Program. Gold partners must have $100,000 in annual net license revenue and be a member of one of the two programs. And Certified partners must meet minimum certification requirements.
Continuing to Advance the Channel
Epicor has been hard at work adding more Partner Programs to the channel with such enhancements as the Epic Bundle, the Vertical Markets Specialist Program, and the Referral Program.
The Epic Bundle, priced for five to ten users, is positioned to help partners win new business. The bundle is designed to help partners, compete for price- sensitive clients, especially where the customers are looking for a Microsoft SQL Server platform.
The Vertical Markets Specialist Program identifies, promotes, and supports Epicor VARs who have a vertical market focus that matches Epicor’s eIndustry vertical markets, which include distribution/warehousing, hospitality and restaurants, not for profit, computer and software services, professional services, financial services, and sports and recreation. This program allows for joint engagements with Epicor’s direct sales and other partners, as well as marketing programs, such as lead generation and eLearning seminars.
Finally, the Referral Fee Program allows Epicor VARs to become Referral Partners for those products they are not authorized to sell. If a referral/lead closes within six months, partners receive 10 percent of the net license revenue. Plus, non-authorized partners can work with Epicor’s Direct Sales force and Epicor VARs on sales opportunities they bring to Epicor.