Product Mix and VARs

Product Mix and VARs (Value-Added Resellers) was a topic on an expert platform I'm a member of. We haven't discussed product mix before, so let's do that now.

Product mix is generally a topic for larger organizations, like VARs, chain storefronts, and big box retailers, who have different kinds of customers walking through their doors.

So it's a question of Market Segmentation.

witches brew product mix

Product Mix and Storefront Retailers

You have different kinds of customers within the overall market. Say for example a retail outlet that provides mechanical items (nuts, bolts, screws, plastic electronics housing boxes, power tools, and the like.) They get different kinds of customers:

1 > general contractors with large projects, who come in with requests for bids on say $50K+ worth of goods; maybe they won a project for building a school

2 > subcontractor builders who have been assigned part of that large project, and will buy say $500 - $5000 worth of stuff at at time


3 > ancillary subcontractors such as metal fab or woodworking shops who are doing a part of a piece of the project (say a fab shop is doing some big steel ironwork support, making bolt-together I-beams for structure), and they come in once in awhile when they realize they need something; it's a $10 - $1000 purchase.

The retailer has to be prepared for all of these possibilities. They can charge a premium because the customer wants it TODAY--not having the item holds up the project.

So they track what sells with an inventory management system, and divide the items up into A, B, and C items. A is the highest volume, highest price, biggest markup; C is the stuff they don't sell much of and don't make a lot of money on, but have to have because occasionally one of the segments needs it and they're catering to that.

Now after awhile you have some decisions to make.

Such a retailer in my home town entirely rid themselves of B and C items, and even stopped accepting cash as payment. Everyone had a credit account and was billed monthly. No more side trips to the bank for change, managing floats, worrying if someone was skimming the till...you can see the upside.

That's a product mix decision.

Product Mix and IT VARs

Another example:

An IT VAR is mid-channel; they buy white label hardware and software from manufacturers and developers up the chain who do NOT want to be bothered with retailing to the unwashed masses, and add their own branding to the final product.

Consider all those ~$100 tablets that came out last year. They all have the same chip in them. The manufacturers are mid-channel; they add value by completing the packaging job with screen, battery, sound, memory, etc, and put their own label on it. But then they have to SELL this thing somewhere...

They have relationships with chain retail sellers, small but highly trusted influencer organizations (eg. an accounting firm that also sells accounting software), IT shops who fix and install networks, and Managed Services providers who go around to different companies and maintain their IT equipment.

Each segment has its own needs and mix.

Now imagine you are the executive in charge of the sales and inventory managers of that VAR.

You need enough items in stock to feed the need (demand) from those different market segments.

You also want to avoid over-investing in inventory, because that ties up working capital.

Also, your sales staff are asking for direction. What should they "push"? Are the developers from the top pressuring you to move their product, or they'll consider giving the distribution rights to another VAR?

All this and more goes into the product mix decision. You have to see the future, watch your Planned vs Actual like a hawk, ensure inventory is on hand Just In Time, and a number of other crazy things.

Supporting this, ideally, is a robust integrated CRM, accounting, and inventory management system.

>> Jason Kanigan is a business strategist with operations management skills & experience. To discuss your product mix, book a call with Jason.<<


Creativity In Your Life

Last week I got a drawing tablet.

It's kind of amusing, because I later discovered I could do quite well with my finger and a touchscreen tablet, but that's not what is most important.

They key outcome is getting this drawing tablet got me being creative again.

creativity in your life with drawing tablet

Creativity doesn't have to be expensive. This drawing tablet is under $50

In the business world it's easy to compartmentalize people into boxes: they do this one thing, and that's all you know them for.

Over the past several months I've been writing children's fiction for a colleague's comic series. Some people heard about this and were astonished. What, wait? Jason's a copywriter: how could he write fiction??

Truth is I've written over 50 short stories. In my high school I won an award for being most likely to succeed as a writer. I've been writing all my life.

Are You Blocking Creativity In Your Life?

Painting, though...I always knew I could do it. Picked up watercolors in my early 20s. That would be back in the 90s. When I sketch, I'm not great...my style is more a cartographer, slow and careful. I can emulate well: give me an album cover and I can draw the person on it recognizably well.

Painting people with watercolors is a mismatch. Watercolor is an unforgiving medium and it can be difficult to convey detail. You can't really layer. Putting two wet paints next to each other results in unattractive muddiness. But I didn't want to invest in oils or acrylics—watercolors is what I had handy, and so I stuck with it.

Funny thing, although I had the tools suitable for painting landscapes, I simply wasn't drawn to that subject.

creativity in your life with drawing tablet mountain

My first sketch with the new drawing tablet and app

At the end of 2001 I decided to stop training martial arts and begin concentrating on my political career. That decision also spelled what until now I thought was the death knell of my painting activities. I never had the time after that: setup, clean up, the effort of painting, struggling with the canvass...no thank you. Not to mention the challenge of choosing a subject. Of course, this was an illusion—I just would rather have been doing something else.

I had some great experiences leading committees of council in the City of North Vancouver, and running in two elections. That allowed me a creativity of a sort, for I was leading groups of intelligent and passionate people, mostly from the social worker field and some from business and real estate development. I learned a lot. How to initiate an idea and get support for it before you've started, especially.

Sticking To One Creativity Outlet Only Can Burn You Out

During the early to mid-2000s I continued to write. I'd crank out a story a season. Into 2006 and 2007 I found I could write "funny"; a lot of front page comedy articles on a parody site of Wikipedia are mine.

But after I moved to the US, creative expression of these types ground to a halt. I have an H.P. Lovecraft-style story that has sat in development hell, half completed, for five years. The only kind of creativity I applied was in my business. Marketing, copywriting, designing offers, creating websites.

And that, by itself, tired me out.

Creating solely in business is like using the same tool over and over and over again...and I live my business. So here I am with this one tool, I'm competent with it, and I've been using it every darn day for YEARS.


A few months back I bought some animation software. Animation, if you haven't experienced working with it, is tedious. I have a tremendous respect for animators now because it's a lot more than just drawing. I've done a couple little test projects, enough to know I can do it, but have let that sit as well.

creativity in your life with drawing tablet midnight expression

Four days plus all those long-gone years of experience in, with the Fresh Paint app. And my finger.

Feeding into the animation software idea comes the drawing tablet.

I have an idea for an intro video for a domain...one of many sitting around in my "that sounds neat" stockpile.

And now I can draw the elements to go into the animation.

Reigniting Creativity In Your Life

Here's why I'm writing this post and telling you about my experience:

Getting this tablet has sparked my creativity. And not just in an artsy way—in business as well. It's permeated into my entire life. I feel reinvigorated. That's exciting!

While I remember "not having the time" to paint with watercolors, there's no excuse like that here. The tablet works immediately. There is no prep. No cleanup, either.

I've found a couple very good apps to sketch and paint with.

And I've been magically "finding" time to paint every night.

The subject I didn't use in my previous artistic life, landscapes, has come front and center.


A couple nights in, after getting used to an app's tools

The energy is back! The excitement is back! The creativity is back.

So I have a question for you:

What creative activity have you been ignoring, putting off, making excuses about...that you could bring back into your life?

Because I can tell you, it has a huge spillover effect.

>> Jason Kanigan is a business strategist focusing on new market development and conversion. He is currently busy fingerpainting on a touchscreen tablet, so please forgive any delays in response. <<