Establishing and maintaining a Federal Supply Schedule (FSS) contract can be a daunting and resource-draining task if the Federal market is not intending to become a primary source of revenue. In those instances, a manufacturer could consider establishing a subcontract with an existing FSS reseller as the Federal Government labels them (but often referred to as a distributor in the commercial market). A reseller, generally, includes the product on its FSS contract and then manages the sales that flow through that contract, which can offer both advantages and disadvantages to the manufacturer.
Advantage | Disadvantage |
Streamlined Procurement Process:Â FSS Resellers simplify the federal procurement process. Not only do they handle mandatory reporting requirements, they also ensure proper product listing on GSA Advantage, etc. | Delayed Response Times:Â In listing product(s) with a reseller, a manufacturer is intentionally introducing an intermediary who may have competing priorities, which can delay communication and order fulfillment. |
Expertise and Guidance:Â FSS resellers are well-versed in each schedule specification and can support identification of the solutions for a product. They can anticipate Government demand, compare competitor features and pricing, and ensure compatibility with existing federal requirements and/or systems. | Loss of Control:Â By utilizing a reseller, a manufacturer must be comfortable with relinquishing a level of control in the sales process that it might otherwise enjoy. Negotiations and customized solutions will be handled between the FSS reseller and the Government. |
Volume Discounts and Special Offers: If a FSS Reseller has a high volume of sales with its other products, then it may have advantageous pricing relationships with the Prime Vendor contractors, which can provide a direct savings to the manufacturer. | Limited Product Selection: Resellers may not choose to carry a manufacturer’s full range of products based on its own assessment of Government demands, which can limit which products are available on the FSS. |
Consolidated Billing: Resellers can provide consolidated billing, which can simplify a manufacturer’s accounting process. | Additional Costs: Resellers typically require a minimum markup, which may require additional product discounting to ensure price competitiveness. |
Overall, using a reseller can be advantageous in saving a manufacturer both time and resources; however, it is important to carefully both the pros and cons before committing based on a manufacturer’s own assessment of the market and its potential. At a minimum, this assessment will create a strong negotiation position with the reseller if that is the best path.