Without resellers, TIW Technology wouldn't sell a thing. The accounting and manufacturing software vendor relies completely on its channel for product sales and doesn't plan to change its methodology any time soon.
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"We pride ourselves on building relationships, which has put us on a steady growth path for the past 20 years," says Roy Hoffman, director of marketing. Over the years, the company has taken on 650 resellers, about 125 of which Hoffman considers active. Of those, the majority has had a relationship with the company for at least three years and express satisfaction with the way TIW treats the channel as well as the way the company has developed its products.
Hoffman notes that TIW experienced a 32 percent increase in revenue from 2005 to 2006, but would not release specifics because the company is private.
In 1989, TIW started offering Workshop Manufacturing, a third-party add-on module for accounting software, particularly products then known as SBT VisionPoint and SBT Professional Series (now Accpac VisionPoint and Sage Pro) followed by AccountMate in 2000. In 2001, the company developed its own accounting software, Alere Accounting, and many resellers who had already taken on Workshop were intrigued. Of TIW's 6,000 customers, about 50 percent are manufacturers; Alere makes up 25 to 30 percent of the installed base, and 50 percent of those are manufacturers as well.
Miami-based All Business Consulting started as an SBT reseller in 1991 and took on the Workshop module in 1995. The company chose SBT because of its source code, which allows the software to be modified to fit user needs, according to Robert Podgorowiez, All Business Consulting's president.
When Podgorowiez heard about Alere, also a source-code product, he didn't want to drop a product in which he already had invested so much, but Hoffman convinced him to see a demo, and it impressed him enough to partner with TIW.
"It was everything Accpac [Sage Pro] was missing and so much easier to modify, and since our business was so much about customization, the ability to help clients was unbelievable," Podgorowiez says.
He took on Alere in 2003 and has been converting customers slowly but surely. More conversion opportunities exist with clients looking to make the move from QuickBooks, which is going to become much easier now that the April release of Alere, version 5.1, includes a QuickBooks conversion tool.
Typically conversions cost anywhere from $4,000 to $10,000, but Podgorowiez estimates this tool will reduce the cost to about $2,000, allowing him to pass on savings to his clients. He also plans to form alliances with QuickBooks resellers.
"Alere has the same power as [Sage Pro] with the ease of QuickBooks," he says, noting that this conversion tool is something he's pushed for and that he appreciates that TIW listened, as they have with other issues he's raised.
All Business Consulting also created a handheld device called RoutePro, which syncs with distribution clients' accounting systems so they can track deliveries, replenish truck inventory and handle end-of-day reconciliations from the road. It was originally intended for the former SBT product, but the first Alere customer came on board this spring.
TakeOff Systems is another reseller that started off with SBT and took on Workshop. Then the Barrington, R.I., company beta tested Alere and has since converted about 60 percent of its SBT customers. Many of the ones who haven't switched say they plan to eventually.
"The Alere product is such a phenomenal product and it is much more affordable for our clients," says Bruce Collemer, president of TakeOff Systems, noting that the accounts payable and purchase modules are combined into one in Alere's application and therefore cost about half the price of the Sage modules. "Right away, there's a financial incentive."
He believes that the rebranding TIW is undergoing to position both manufacturing and accounting products under Alere Business Applications will help him sell more by incorporating the link between Workshop and Alere, because the latter name is more broadly recognized despite the fact the former product existed longer.
Additional features and functionality attractive to Collemer and other resellers include the elimination of the month-end closings that exist in legacy systems, the ability for every transaction that takes place to immediately update in the general ledger as opposed to in batches, the ability to open multiple screens simultaneously and the latest version's Fetch feature, which Hoffman refers to as "the search engine that's always ready to play."
The tool can retrieve information from anywhere within the package based on any search criteria from purchase order number to a customer's check number to item description.
Collemer also appreciates the comfort level of having consistent personnel at TIW and staff who work on East Coast time so that he can answer his clients' questions while they are in front of him.
Clear Rules And Pricing
He also favors the "simplicity of doing business [through] clear pricing and rules required [of resellers]."
"They have fair margins and volume requirements," agrees Bob Aubry, vice president and co-owner of Main Street Software, a Landisville, Pa.-based reseller that also started off with SBT in 2000 and took on Alere 18 months ago because of Aubry's frustrations with ownership changes and shrinking margins from the other vendor.
VARs starting off with TIW pay a $995 sign-up fee per solution (Workshop Manufacturing and Alere Accounting). The base margin is 40 percent, which can increase to 50 percent based on sales volume.
The optional Software Maintenance Agreement consists of a yearly fee of $395 per product, which provides dealers with the ability to receive a 15 percent sales commission on seminars or training their clients receive, eligibility to participate in TIW's Direct Mail Program and first choice on leads generated by the vendor.
Because it is TIW's policy to sell products and services through dealers, if the company receives a customer request to take an order, it first attempts to refer that customer to the appropriate dealer. If that is not feasible, that dealer is paid a commission equal to the amount of the discount it would have received on the products (3 percent is subtracted if the client pays with a credit card.)
If TIW receives a lead in Chicago, it does not send that lead to all of its Chicago resellers. Instead it tries to match the prospect with a channel member that has areas of expertise most related to that company's line of business, Hoffman says.
"A lot of what I've seen from experience with other software is they end up competing with each other. It ends up chewing up the resources of more than one VAR at a reduced price," Hoffman says. "The enduser is a lot more savvy than they were 10 years ago. It's encouraging because they call and identify what their requirements are."
To meet those requirements, TIW would like to add four or five resellers to its channel every month for the next four to five years, resulting in "a very strong penetration through the nation."
It is looking to recruit in Texas, southern Florida, and the Midwest, particularly Illinois, Indiana, Ohio, Michigan and Wisconsin. It also wants to strengthen its presence in the greater New York metropolitan area, where TIW has "a handful of good VARs, but the demand exceeds their capability," Hoffman says. "We push them a little bit, and that does not necessarily provide a hot lead the immediate response they desire."
Aubry enjoys both the lead generation and marketing assistance.
"Traditionally accounting software VARs are not great at marketing. TIW made it easy for us to create and implement a marketing plan," he says. With the Direct Mailing Program, Main Street Software receives a list of 10 to 15 companies to whom TIW sends product postcards each week, then Aubry and his staff can follow up with them.
He also works with a business development manager whose job is to generate ready-to-close leads, not prospects. Aubry finds this particularly useful when he is handling client implementations and doesn't have time to focus on sales.
"TIW's group is building things into the Alere product at a pretty quick pace. As quickly as we can handle it, they are moving," Aubry says. "They're goal is to provide us enough new and exciting business that we have enough revenue to fund our own business development manager."
Alexandra DeFelice is Associate Editor of Accounting Technology and can be reached at firstname.lastname@example.org.
HQ: Easton, Pa.
Number of resellers: 125
Products: Alere Accounting, Workshop Manufacturing
Web site: www.tiwcorp.com