I’ve heard Toast has fired all their resellers. Is this true?
We’ve heard the same thing except that there are at least two Toast resellers remaining. In our validation checks with the “fired” resellers we got a lot of “no comments”, likely because of the anti-disparagement clauses we’ve seen in the Toast reseller agreements that scared away anyone who doesn’t know how to read a contract. At RSPA there was little fanfare at the Toast booth, and we heard that Toast only held the booth because RSPA requires a booth for private meeting space.
This is a good lesson for VARs: venture-funded companies that have taken the amount of capital Toast has have to grow really fast. Channels just get in the way of this growth, as the singular reason for a channel is to cut down on direct sales and marketing costs. When you’ve raised $500M, why do you need a channel?
It’s also going to be hard for resellers to make quotas when Toast is materially subsidizing the hardware and software to win market share – i.e. why would a merchant use a Toast reseller if they could get the same system from Toast for no upfront cost? We explained this inevitability a few years ago but many former Micros resellers were desperate to pick up a product as Oracle pulled the Micros product back from the channel.
We hope these resellers made some money and bought themselves the necessary time to find the next POS to sell. Then again, by not sharing their experiences they don’t give the market any learning opportunities. So their current situation could be a bit of Schadenfreude.
RSPA’s RetailNow seemed dead. Was it just me?
We haven’t been to many RetailNow shows (five or thereabouts) but this was by the far the least trafficked show we’ve attended. Someone who has attended 34 RetailNow shows confirmed your observation, however, and said this was the poorest showing by a good bit.
There are three possible causes for this.
- The economy
- The venue
- Channel consolidation
The economy seems pretty good to us and the stock market would agree. San Antonio, where this year’s RetailNow was held, is not as easy to get to as Vegas or Chicago, and it’s also pretty hot in late July – so this shouldn’t be ruled out as a major factor in poor turnout.
But we think the attendance drop is related to the compression of the channel. Software companies are selling payments and their core software directly, so why deal with an ISO or reseller? Unless that reseller is going to become a consultant and help your business – and 98% of them aren’t – it leaves a smaller and smaller market for the channel. Think about it: small merchants are self-selecting POS online and larger merchants are going direct to the ISV.
It ain’t exactly rocket science.
A few resellers said they didn’t attend this year because session content was “old hat”. In some form of irony much of the session topics are for resellers who don’t attend – the ones that attend have already transitioned to SaaS models and are picking up other products as conventional hardware and services markups disappear.
ISVs, who previously had flexibility in scheduling meetings with their resellers at RetailNow, are now finding themselves more confined. “Now we can only have dealer meetings on certain days, at certain times, and it’s no longer free.” By our estimate that has turned off a number of ISVs from holding join reseller conferences which could also explain depressed attendance.
RSPA will likely need to merge with ETA or some other trade association to survive. Few of the new POS companies are utilizing channels, and even fewer are members of the RSPA. This trend won’t reverse itself. Many of the exhibitors found no reseller interest at this year’s show and that makes their marketing spend on booth space a loser. How much longer will they justify it?
Perhaps moving the show back to Vegas, which RSPA will do next year, will resolve some of these issues. RSPA wouldn’t comment on the matter.
Catch you next time
As an attendee of many RSPA shows, I decided not to attend this year’s show. The main factor was a lack of any real value obtained from the show last year in Nashville. Here is how I saw it. The show cost my company nearly $5000 to attend in travel costs, hotel and resort fees. The exorbitant cost of the venue was another offputting factor. $369 a night for rooms (our discounted corporate rate) and $39 parking. There was nothing new under the sun at the trade show and the networking opportunities limited. I was seeing the same old vendors, same old products with everyone complaining about the cost to come to the show (both vendors and attendees). I am even questioning the value of my RSPA membership because it doesn’t seem to be of much value to me as a small POS dealer and reseller. Now, on the other hand, this year Heartland sponsored a dealer conference in Kansas City, MO this year and it was a real winner. I got to meet with vendors of our products and network with vendors and dealers. There were great classes of the new product and services Heartland is bringing to market. Heartland treated us very well, nice breakfasts at the hotel, a couple of Dinner banquets and cocktail receptions. I left feeling the trip was valuable and gave me something I can directly use in my business. Unlike the RSPA conference that leaves me feeling drained and ripped off. KCM being a second-tier city in a Flyover state was economical to travel to and rooms at the venue were $89. I am definitely going to the Heartland dealer conference next year. As for RSPA, I will just pass, again.