Why do independent vendors need NAM?

Consider the following points:

  1. Vendors must have national representation to secure long term national customers who have locations in multiple markets.
  2. The mechanics behind a national account program require an ability to distribute and service in all 50 states
  3.  Sophisticated and expensive software is required to serve any major national account.
  4. Any national sales position will add significantly to payroll.
  5. Vendors service national client on a local level are vulnerable to large national competitors.

What is the trade off for me as an independent vendor?

In order to bring an acceptable return, the vendor needs to attain a gross margin between 40-45%.  Most good vendors will work their OCS margins up to 50% over time.  The cost to the vendor for sales and marketing cost to the vender ranges from 4-6%.  CSG executes a trade off that compensates CSG for their work and brings direct cost and soft cost (admin) savings to the corporate client.  The vendor sees a reduction in overall gross margin but attain a proportionate savings in their G&A.  Here is the gross margin/overhead trade off.

  1. Strong local vendors are more likely to receive additional service locations for a particular client which will increase their gross margin dollars.
  2. The local vendor now becomes eligible to participate in the servicing of other NAM corporate clients in their service area
  3. The local vendor receives highly qualified representation for “Key Accounts”
  4. Local vendor  service locations for national clients are preserved under long term CSG/Corporate Client contract
  5. Other CSG services become available to the Vendor Partner (products, M&A services)

Conclusion:

In today’s economy, the corporate client is looking for consolidation and cost savings.  The large national providers have the tools, finances, and expertise to bring them a program.  CSG’s National Accounts Program provides high quality, local vendor to service the corporate client while providing billing consolidation, account management to manage both hard and soft cost savings.