Posted on May 11th, 2010The software control panel industry has developed into big business. There are many control panel software companies available that sell to hosting companies. One downside is these companies do not sell control panel software directly to customers. For individual customers to purchase a hosting control panel, they must buy through a reseller.
Larger hosting companies tend to get control panel discounts than small business or even individual buyers. There are a few reasons that major control panel software providers only sell through licensed retailers including:
- Small number of customers
- Excellent marketing strategy
- International exposure
- Focus on software development
By having a smaller number of customers (the resellers), the major control panel providers can save money on sales, accounts and billing teams. Those companies that would like to deal directly with the software developer can purchase monthly or yearly licenses. Others must consult with another company such as a reseller. Overall, the costs of maintaining many small monthly payments can be high and it’s difficult to manage.
This method significantly decreases costs thus leading to lower prices for all customers. Consequently those corporations receive lower pricing because of the volume of licenses purchased. This relates directly to economies of scale meaning the more you buy, the less each individual unit costs.
From a marketing perspective, control panel software companies can have other smaller companies complete all the marketing and advertising for them. They sell the product and receive a small percentage of the sale while the software provider again saves money on marketing, advertising and sales. This also leaves the firm time to focus on the large volume buyers.
Furthermore, since there are many companies across the globe marketing and selling the software, this gives international exposure to the parent organization. Also, there’s no need to deal with different languages and cultures since there’s a local company in many countries that are marketing to their population.
The final reason is the control panel provider can focus on software development. Since there’s a plethora of companies selling their software, this eliminates the need for putting effort into the other segments of an organization; it’s already completed by competing smaller companies.
The sales, marketing and advertising methods of control panel software providers is ingenious. It uses a reseller to take these functions out of the company thus saving a great deal of money. These reseller companies all compete against each other utilizing the provider’s software. For individuals requiring control panel software, they must pay full price due to economy of scale. This is standard practice in all supply-chains.