Radio Beacon: Picky, Picky, Picky

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Radio Beacon is transmitting a clear message-it’s more technically sophisticated than the normal third party, and supports a variety of accounting applications. And it’s very picky-its systems are designed for warehouse operations that employ wireless devices using radio frequency broadcast to automate warehouse-picking operations.

Founded in 1992, the Toronto-based company specializes in Web-deployed warehouse management software, and the warehouse management system product line integrates with accounting packages. The company’s products interface with three of Microsoft’s accounting lines, Great Plains, Solomon, and Navision, along with the financial packages from AccountMate, Best Software’s MAS 90, 200, and 500, and Accpac.

Although the company has a more complex technology than many ISVs, resellers are not required to have highly technical backgrounds. But it helps.

Partner Insights

“Our most successful VARs have resources with a background in warehousing and distribution. Their sales engineers help customers streamline business processes and map software functions to the new process,” says Carl Marin, vice president of marketing and business development. “They have IT platform implementation capabilities. They know how to implement networks and SQL Server.”

In January, the company re-launched its channel program to include four different levels. The first iteration of a formal program was developed three years ago. However, Radio Beacon has been sold through a partner channel for the past six years, and currently has 60 resellers.

Three different Radio Beacon WMS products support either small wholesale distributor selling to a single retailer or complex, multi-site operations shipping around the world. Users are generally warehouse employees who use hand-held devices or who access the user interface for reporting and labor management via the Web. Radio Beacon pricing is based on the number of concurrent users.

The line kicks off with Radio Beacon Lite, designed for small warehouses with fewer than 20 users and simple warehouse processes. Lite is priced at $7,500 to $15,000. Radio Beacon Full, designed for medium-sized warehouses, offers advanced features such as multi-zone support and kitting functions. It costs $30,000 to $80,000. Finally, Radio Beacon SQL/PRO, serves larger warehouses such as those operated by the Social Security Administration. Its prices range from $40,000 to $115,000.

By using Radio Beacon Lite and a Unix-based Oracle financial system, AGF Mutual Funds’s literature distribution center in Toronto, which mails out application forms, prospectuses, and seminar kits to dealers throughout Canada, increased order volumes by 33 percent, reduced inventory time for high-priority orders from three days to same day, and achieved close to 100-percent picking accuracy.

Furthermore, when Los Angeles-based Argon, distributors of Adidas sportswear and accessories to retailers across the U.S., won the license to distribute Adidas socks, it needed a WMS that could successfully handle the sudden surge in business and the need for faster order cycle times. Radio Beacon, integrated with MAS 200 and an EDI system, provided Argon the ability to double the number of lines picked per day with the same numbers of staff, and to ship orders in 48 hours.

Four-level Program

Radio Beacon offers four partnership programs based on yearly revenue earnings and desired level of interest. These are the Affiliate, Silver, Gold, and Platinum levels.

The Affiliate Program is designed for firms who find the opportunity to help sell Radio Beacon, but don’t believe that it necessarily fits with their primary goals. Affiliate Program partners receive a 15 percent margin on software sales. They receive sales and implementation assistance, access to the partner network, and regular news and updates via a newsletter. No fee or certification is required.

All other Radio Beacon partners start at the Silver level and earn their way up to Gold and Platinum, with margins increasing as the sales levels increase.

In turn, Radio Beacon provides their partners with three evolutions of training. Classes include Technical Certifications, Sales Engineer Certifications, and Sales Certification.

Partners entering the Silver program pay an initial fee of $7,500 and an annual renewal fee of $2,000. They must maintain a $100,000 minimum in annual software sales, and complete one level of certification.

Radio Beacon Snapshot

Radio Beacon
Toronto, Ontario
(800) 247-9526
www.radiobeacon.com
Founded: 1992
Number of employees: 35
Revenue: Retail sales of Radio Beacon software amounted to roughly $6 million in software income for their partners. Total partner revenue for Radio Beacon related software, services, and hardware was roughly $15 million to $20 million.

However, in return, Silver partners receive 20 percent margins on Radio Beacon software. Silver partners who have completed one level of certification get 25 percent margins and earn 15 percent on Auto ID hardware when purchased through Radio Beacon. They also receive one not-for-resale copy of Radio Beacon software, one hardware demo kit and installation manuals, one five-user license for Radio Beacon Lite software, and one free pass to each of the Radio Beacon sales training levels.

Gold partners must achieve $150,000 in software sales or complete two certifications. They pay an annual renewal fee of $1,500, and must maintain $150,000 in software sales. Participants at this level receive three different levels of margins, increasing as they gain certifications. Partners who have completed one level of certification receive 30 percent margins on software, and 15 percent on hardware. Partners with two levels of certification get 35 percent margins on software, and 25 percent on hardware. After completing three certification levels, partners can earn 40 percent margins on software, 35 percent on hardware, and 15 percent on professional services.

As VARs climb up the channel tiers, the requirement get tougher. Affiliates and Silver level resellers do not have staffing requirements. But Gold resellers must have a PTE Sales Engineer, while Platinum members must have also have a dedicated sales person and one Professional Services person for installations.

This enables Platinum partners to receive up to 50 percent margins on software sales, up to 35 percent on hardware sales, and up to 20 percent on professional services. In addition, they must be able to assist other partners in the field with both the sales and implementation elements.

Establishing Expertise

Meeting the vendor’s requirements has its rewards. Bob Gaby, principal for the Encino, Calif.-based Information Technology Group, believes being part of Radio Beacon’s reseller program has put his firm in a unique position.

“Radio Beacon’s reseller program has allowed us to develop a niche in a real growth area. Warehousing software will be a boom area in about five years. Right now there is not a lot of competition but there will be, and we’ll be experts,” he says.

ITG, a consulting firm specializing in accounting software, custom programming, and network design and implementation, has been a Gold member for two years, The firm seeks clients who have stable back-office systems. Gaby says, “Radio Beacon has integration with several accounting software companies, and we look to our mid-market clients with 25 to 50 users, and who must be willing to make a minimum investment of $75,000.”

Once ITG identifies a candidate, it discusses where the pain is in the warehouse, and where the prospect is losing money. “Companies using EDI are good candidates because they suffer from chargebacks due to working with trading partners, and they want to reduce the number of these,” he notes

Gaby spends 30 days studying the warehouse, designing specs for implementation, re-engineering processes, reorganizing the warehouse, and redefining what and how people do their work. From there, both implementation, and system fine-tuning takes an additional 30 to 90 days. ITG completes about five Radio Beacons deals per year. An average engagement ranges from $100,000 to $200,000. The costs include consulting, hardware, software, and with each representing about a third of the cost.

Carly Lombardo is Associate Editor of Accounting Technology and can be reached at carly.lombardo@amgpubs.com.

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