Manufacturer Wants Feedback On Plan To Sell Direct Off Their Website

I've been meaning to post this here for a few weeks, and the recent threads made me finally decide to get some feedback.

For the sake of this question, we're talking about a new company and a new product, not a new product being offered by an existing company.

I have a Magic Widget Box those does some things of value. The form factor is a small appliance footprint, like the Husky NVR or a Mini-ITX box. It connects to power, of course, and the network. It's not an NVR, and for now the exact thing it does is not really relevant, other than to note that setup would be fairly simple and not require a lot of complex or in-depth knowledge of networking, weird RTSP URL's, or things like that.

The target customer would be diverse, but more often than not would have their own IT department, or similar technically competent staff that could handle plugging another device into the network and dealing with basic provisioning.

For the most part, this is more likely to be the kind of product where the end user deals with the manufacturer website or inside sales people to ensure that it fits their needs, though some integrators that deal with certain kinds of customers or projects might be able to offer this to the customer if they were not already aware of it.

As far as the sales model is concerned, this is where my question comes in. MSRP will vary based on license type, but it would typically be between $2500 and $20000 USD per unit.

I plan to offer direct end user sales, via a fairly standard website ecommerce kind of site. If you like the demo, and the inside sales people answer your questions, you can order one direct and have it shipped to you. Discounts would be minimal, they would more be a factor of license quantity than a direct discount off MSRP.

A standard integrator could get 10-15% off MSRP just by filling out the basic tax forms and placing an order. This would cover the cases where the end-user wants the unit (and has most likely gotten any information they need and demos on their own), but wants the integrator to provide a single PO and installation service for an entire system. In this situation, the integrator hasn't "sold" the product to the customer, so they get a small courtesy discount and maybe make an extra hour on labor for handling a simple setup procedure.

Integrators that are doing a larger volume of business, in effect truly selling and not just taking orders will get sliding-scale discounts of 30-45% off MSRP, based on annual sales volumes. This would also allow them to be competitive with the direct sales from the website, as they could price it slightly slower and still make a decent margin.

There are currently no plans for distributors in this model. Volumes are unlikely to be so high as to require a distributor. Credit risk is also low, the direct sales and Tier 1 Integrator (10-15% discount) sales are all credit-card only, no terms in most cases. Larger integrators would get credit terms.

I would enjoy hearing general responses on this (or, maybe I won't enjoy hearing the responses). Is there any reason why this model is not feasible? Any likely problems based on this approach?

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