Business without a product: why create your own, if you can sell someone else's?

The dream of every startup is to assemble a team of cool programmers, make a super product, conquer the market and become mega-rich.
The only problem is that cool programmers usually work well for wages on Russian or foreign companies and are not eager to create super products in their free or working time.

But there is an opportunity to start a business without first creating a product. And this business is called Value Added Distribution (VAD).


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The fact is that in the world there are already a large number of good (and not very) software products that are not sold in your country / region / city (or not sold at all).
That is, manufacturers receive the main income somewhere else (USA, Europe, India ...) and from Russia they receive 0 dollars 0 cents. And they are well aware that this amount just will not grow.

For this, a foreign company will need:

• software translation
• creating a local site with customized content
• hiring Russian-speaking staff
• staging lead generation and sales processes
• registration of sales under the Russian laws

That is, a lot of costs, and the benefit is not clear. Will people in Russia be incomprehensible for the Indians to buy their software? Is the cost justified?
Indeed, for many, Russia is still identical with this picture:



And here comes VAD. He assumes all risks and costs. The manufacturer’s company (vendor) is only required to provide source materials for translation and adaptation, and then deliver the product for resale.

In fact, VAD will play the role of the company's representative office in Russia. All purchases of this software will be strictly from him, no partner has the right to contact the vendor directly and buy software from him.

On the pleasant - for their services VAD retains 50% of the cost of licenses. From 50%, but in reality this figure can reach up to 80%. It all depends on how much the vendor does not believe in the possibility of independent entry into the Russian market. If he does not believe at all, then, I repeat, the amount earned in Russia will be zero for him. And VAD is ready to give the opportunity to earn at least something. And at least something is always better than zero.

Oh less pleasant. Those programs and services that are in dire need are rarely unclaimed.
If the manufacturer has managed to create a new software market in the United States, where licenses are bought up like hotcakes, then he will have the strength and resources to organize the promotion of his product in Russia.
The share of VAD remains numerous backup systems, system monitoring, antivirus, office suites and more.


Many goods, few buyers

So does it make sense to become a VAD? Honestly, I specifically thickened paint. If everything was so gloomy, then numerous Russian VADs would have been ruined long ago.
And they live and some even thrive. And this, in turn, proves that this is a completely profitable business - if they are properly engaged, of course.

How to become VAD? I suggest the following algorithm.

• Decide what software market interests you. .
• Understand whether you can offer something fundamentally new to the market. Perhaps you can write a system that, based on the neural network algorithm, will predict the potentially dangerous actions of personnel on the PC. In this case, you do not need any VAD - write your own!
• If you understand that no matter how you pack a pram, anyway the machine gun turns out no matter how you try to create a unique product, you get the same thing as the competitors, then the VAD way is for you.
• Further arm yourself with Google search and look for suitable companies. They may be foreign, and may be Russian. In the second case, the reason for their lack of control may be not the poor quality of the product, but the fact that the founders are good programmers, but bad sellers.
• Write a letter to the company offering cooperation. Here it is best to paint the potential market more beautifully, but at the same time not to make specific promises - oh, how they will ask you for them.
• Meet with representatives of the vendor and sign the contract. Attention should be paid to two things: exclusivity and the term of the contract .

Exclusivity means that no tricky customer or partner can buy the product directly from the vendor. And there are certainly those who want to save money. And the better the process of unwinding the product goes, the more there will be those who try to get around you.
The term of the contract is not less important parameter. If you succeed and the product / brand becomes really famous in your country (or more locally, region, city - and you don’t need to get exclusive all over the country), then over time, the vendor’s managers will have the desire to remove the unnecessary (now!) Intermediary and work directly . Of course, after you do all the dirty work, your company will become unnecessary. And here you must protect the term of the contract! You can write in it a condition that if the sales plan is fulfilled, then the vendor does not have the right to terminate the contract independently.
Of course, sales plans need to be set not too high. At first, the vendor will calmly relate to the non-fulfillment of these plans (remember that even one dollar is better than zero), but can later be used to terminate the contract or put pressure on you.

• Begin localization of vendor materials. First of all, this site and flyers. Do not be lazy and avoid stupid translation of materials, it is better to rewrite everything in the usual form for Russian companies. It would be nice to Russify the product / service interface. But this process is much more expensive / resource intensive, so maybe you will do it a bit later.

Do not hesitate to ask the vendor for money (if this is a large enough company in your market, of course, and not a couple of guys in tattered sweaters) for marketing needs. At the very localization, to print leaflets, to participate in exhibitions. Perhaps you will be refused (even very likely) under the pretext that they have already given a big discount, but suddenly.

• Start promoting the product. You do it the same way you would promote your own development - PR, lead generation, account management.

And the last. When promoting a product and vendor brand, do not forget about your own brand.
Sooner or later, your romance in the vendor will end and it is very important that the story of your business does not end there.
And yet - after all, it is not necessary to limit oneself to promoting only one vendor. Good VAD has dozens of them.

In general, good luck in business.

Here is such!

Andrey Ignatov