Should Integrators Sell Inventory Management Software? (guest blog)

A visit with Israel Lopez of FishBooks Pro LLC

According to Israel Lopez, co-owner of California-based FishBooks Pro, not only does selling inventory management software make sense, his company’s life (it doubled its revenue in 2010) depends on it. Here are Lopez’ thoughts on when and how inventory software as a channel product makes good business sense.

How did you get into the market of inventory software?

I came into this background as an information technology (IT) professional with a strong specialization in working with small businesses, public companies and data centers providing strategic IT support. It was through one of my employers where I gained specific experience with enterprise resource planning (ERP) systems, warehouse systems and inventory control.

That’s the background I have that brought me to FishBooks Pro. We support both inventory management customers and also value-added resellers (VARs) who are selling inventory management software to help them get the most value and utility out of the software they buy.

Can you suggest the kind of VARs who could benefit best from selling inventory software?

Far and away, every VAR who is a QuickBooks® Solutions Provider is a strong candidate to be selling inventory software that integrates with QuickBooks as well. The VARs we work with who are doing this are generally ranging from $5 million to $50 million in revenue per year. This is a natural market and an ideal way for these VARS to make substantially more income than they could achieve from the sale and the consulting service you gain from QuickBooks alone.

Not every VAR or customer is a fit, of course. For example, for very small businesses with a 5-user license of QuickBooks, their need for highly-tuned inventory management is likely not high (although a very small business is also more likely to have simply purchased their software from a retail outlet or online than to have bought through a VAR).

But for the small-to-midsize business customers using QuickBooks Enterprise – and particularly for the customers hoping to achieve the maximum benefit possible from their QuickBooks solution before moving on to a high-end accounting package or ERP solution – there is a tremendous opportunity to provide inventory software that makes the company more efficient and profitable without requiring them to buy the kind of advanced accounting and ERP a large company would require.

Is the sale of inventory software lucrative?

It can be. For customers in companies earning $3 million to $10 million, for example, a typical inventory management sale could amount to $30,000 for the software license and consulting required, with appropriate margins. We’ve had some engagements total as much as $60,000. However, the even greater opportunity is to support that customer, post sale, with hands-on guidance in creating and using the reports that will make the biggest possible difference for them.

That’s become the thrust of our own business – we support inventory customers, but we also have a sizeable business supporting other VARs and their customers with custom training and implementation for inventory buyers to be certain they get the best possible impact from the software purchase they’ve made. And making a company more profitable not only nets consulting revenue, it helps to ensure you have a satisfied and continued customer for life.

Our own practice has become specialized enough on implementation and consulting that we are actually supporting other VARs as the vast majority of our practice, which makes us happy to do what we are able to help them succeed. We’re on the West Coast, but we’re available to help VARs and customers in any locale.

Do the VARs you’re working with sell or recommend other accounting products than QuickBooks?

Actually, for the market segment we’re addressing QuickBooks is far and away the dominant solution. We consult with just one inventory product, Fishbowl Inventory (thus our name). Fishbowl is the number one most requested inventory solution for QuickBooks, and the only solution that’s fully integrated with QuickBooks.

While there are some other inventory software products, these tend to be more mid-tier options. Our experience is that Fishbowl provides over 90 percent of what most companies need. The last 10 percent we can cover with reports and processes – so they’re still ahead of the game. We are able to give those customers a lot of value for what the software costs.

It’s generally a company’s first serious enterprise inventory management solution, so there’s a learning curve – but not nearly what they’d have on a higher-end system. So for the time and cost of helping a customer to get to this point, this is a great value – and a great opportunity for any VAR and especially for any Quickbooks Enterprise VAR.

Israel Lopez is co-owner of FishBooks Pro, and is an IT professional with more than six years experience working with small businesses, public companies, and internet networks. His first experience involved working with data centers, providing customer service and network engineering. In his current role, Lopez works with Fishbowl Inventory VARs and customers to prepare business intelligence reports and develop new products for the Fishbowl Inventory platform. He is also an avid Snowboarder and member of Engineers Without Borders, currently serving as Regional IT Coordinator.