Dave Wright - 05 August 2009 08:22 PM
While this may appear to be a great way to expand business, it can turn into a hornets nest of problems. Becoming a service provider for DirectTV or cable companies can take away from installs for other items that generate more revenue. Rolling a truck for just a satellite dish or cable installl is not cost effective unless it is all that you do and do a large number in a day. Another point to consider is the support costs, once you are known as the service provider you will need to support it. This too requires a large staff to support..
On the up side, adding these services can provide a benefit if they are only done as part of a larger install where a complete theater or whole house system is being performed. At a former company we would not perform a satellite installation unless we were installing more, the cost of sending an installer to just install a dish was not worth the cost or the truck roll,, even though we sold DirectTV boxes and service. Customers wanting only satellite were reffered to the DirectTV installer, if they wanted more we would perform the install as there was an increase in the overall installation.
Bottom line is that experience has shown that adding services such as cable and DirectTV can be beneficial, that benefit can only be seen if it is handled correctly. Look at the cost vs. the profit and come up with a business plan before signing the deal…
I agree with Dave, you really need a 20 man group if you carry inventory, do 2-2-2 follow ups to avoid chargebacks, inventory audit, manage sales crew, and make sure your installers show up to the job site. You can sign up with fulfillment, but you have to do hundreds of activations to qualify for that, and if you’re starting up it’s hard to commit to that kind of volume. Or you can partner with a company that has distribution agreements (high volume) so that you don’t have to worry about inventory and installations.