Mercantec: Risks (Part 7 of 8)
Risks
Mercantec licenses its product to ISPs and other partners who then
relicense use to individual store operators. These partners, as with
most indirect sales channels, will sell what their customers request.
This places the onus of success squarely upon the shoulders of Mercantec.
For the company to continue to succeed in the long term, it needs to
convert its product into a “pull” product that potential shop and store
operators request by name. To do this requires not only having the
correct functional pieces, but also positioning. Mercantec must be
perceived as a company that can provide a broader framework for commerce
that proactively drives the sales at its member stores.
As Mercantec offers an increasingly comprehensive framework, it runs the
risk of competing on some fronts with its sales channel. Inevitably,
companies that transition from niche players to architecture-based
solution providers become much closer to the actual customer, thus
bypassing the indirect sales channels that helped propel them to this
very transition point. Balancing channel conflicts is always a dicey
proposition, and, in this case, it bears watching, especially given the
dearth of direct contact between Mercantec and the shop operators.
Mercantec’s desires to be the virtual mall developer of the future may
help the company avoid some of these conflicts if its goal is largely
to own the real estate, so to speak, and not the customer.
Part 8 - Net/Net
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