But how can some of the problems encountered while selling to service providers be solved? “We need to evaluate the service provider in terms of financial capability and ensure that his customer pays him on time as well,” says Vivek Mata, Managing Director, Charnock Equipments Pvt Ltd. The first major problem that most of the suppliers face after making the sales is training the client staff on machine usage and do’s & don’ts of the machines.
We need to evaluate the service provider in terms of financial capability and ensure that his customer pays him on time as well.” – Vivek Mata
“Since the machine operators are unskilled labourers, even basic electrical knowledge is not known to them. Besides, the labour turnover in the hospitality services industry is much higher so the need to train and retrain the staff at frequent intervals is far higher. At times, the buyers also make the wrong choice of machines which leads to further complications between the service provider and equipment supplier,” adds Samir Sabu.
Often to save on the initial investment, machines of lower capacities are bought which results in frequent breakdowns. Add to this, if the contracting company is penalised for poor services, it tends to hold back the payments of the equipment suppliers and other vendors. “We feel that if these issues can be resolved, the industry would have more win-win situations in which all are benefited.”
Often ignorance in maintenance of machines leads to several complications,” feels Venu too. “Training to the supervisory staff of the service providers is important. We need to provide comprehensive annual maintenance contract and do regular visits to understand the site problems. Another good move will be to do the visits along with the service provider. So that we can suggest the right machine as per the site requirement.”
Arun Thapar also agrees that educating the staff of the service providers is very crucial “Very often, the right kind of spares and consumables are not ordered adding to the problem of lack of trained staff.”
Service providers do face tricky financial situations as they are dependent on the end user companies and different vendors. The equipment provider can have an arrangement with any of the banks by which the necessary loan is sanctioned to the service provider on a convenient EMI basis. Not only does the supplier get his money promptly, but the contracting company also gets the flexibility of easy repayment. “This is feasible only with some of the leading service providers since the banks will not give them loan unless they have some assets, etc. We have not yet done this but are having dialogue with some financial companies,” says Mata.
The first major problem that most of the suppliers face after making the sales is training the client staff on machine usage and do’s and don’ts of the machines
Venu Madhavan also feels that loan from the bank is a feasible option. “We need to have dialogue with Nationalised and Schedules Banks operating in India. As this market is booming, definitely financial aid is required to many facility management companies to get the capital equipment. If we go ahead with the EMI option, there should be an agreement signed between the equipment manufacturer, end user, the bank and the facility management company. Hence, we can even think of getting the EMI directly from the end user in many cases. If we do so, the agreement becomes even stronger.”
“While doing direct selling, we can understand the need of the ned user more clearly and can satisfy their request for better price and deal with their anxiety for after sales support and availability of spares.” – Arun Thapar
Inventa is already trying to offer loan facility when the payment is made by the buyer on his credit card. “We are tying up with banks and the credit card companies to extend comfortable EMI plan,” says Thapar.
Getting a loan in today is far easier than a decade ago and if the service providers enjoy a healthy reputation with their own bankers, there may not be a need to search for new financiers. Adds Samir, “In many countries, the payment is directly credited into the supplier’s account through ECS as instructed by the buyer. This form of payment is prominent in India for auto loans but not yet made available for our industry and should be definitely explored.”
“At times, the buyers also make the wrong choice of machines which leads to further complications between the service provider and equipment supplier.” – Samir Sabu
It can also happen that if the financing has to be arranged by the equipment supplier, he may tend to charge a bit more for his efforts. “If the loan part is not brought in, the service provider may be in a far better position to focus on bargaining over the pricing of the equipment rather than payment terms with the equipment vendor.”
It is important for the service providers to get adequate knowledge about the equipment capabilities & applications and also about budgeting. Supply of properly serviced equipment depends on the healthy payment processes between the supplier, service provider and the end user. Selling can be direct or indirect.