SMB discounter calls for help

An unexpected twist to its business model has seen PowerBuy, a discount buyers group invented by ex-Dell marketing man Joel Montgomery, put the call out for channel partners.

PowerBuy began four months ago as a way for SMBs to get discounts on IT gear said Montgomery.

During his time at Dell he realised that vendors wanted to pass on discounts to small businesses but found he didn't know how to without undercutting retail prices for consumers.

"I started PowerBuy to help small businesses get a better deal on their IT purchases," said Montgomery.

"I figured that the collective bargaining power of thousands of small businesses could attract discounts usually reserved for the big end of town."

The cost of acquiring business customers through conventional methods is high for IT vendors, Montgomery added.

He originally pitched the idea of a buyers'group to second and third ranked vendors in networking, storage and other areas.

They would win market share by targeting SMBs with discounts through a rebate and coupon scheme run by PowerBuy.

The goal is to get SMBs the best price for IT.

The concept has proved popular. PowerBuy signed up 1,600 small businesses in its first year. Montgomery said he was aiming for 10,000 members.

"We're keen to partner with a select handful of VARs who can provide trusted advice to our members and who are interested in acquiring more small business customers," he added.

PowerBuy's recruitment was aided by an SEO agency which boosted Google searches for Dell coupons, for which the group now ranks fourth.

At first Montgomery wasn't sure how his buyers group would be received by resellers.

However, he found that resellers could use PowerBuy to differentiate themselves from retailers like Harvey Norman.

Resellers are already working with the group, including Wireless 1, Digiworld, Scorpion Technology and Techbuy.

The resellers submit cashbacks on the customer's behalf and pass on the discount while holding their own margin.

However, they are not allowed to advertise the lower price. SMBs must have an ABN to qualify.

Montgomery said his 1,600 members kept asking him for recommendations for trusted resellers to install their IT purchases.

A trial with Computer Troubleshooters has gone very well, said Montgomery.

He is looking for more VARs to service PowerBuy members.

To sign up to PowerBuy click here