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SCADA System Purchase: Manufacturer Vs Distributor

By Morgana Siggins

December 4, 2019


Did you decide to deploy a SCADA system to your network? Are you in the process of selecting the right remote monitoring vendor for you? I'm sure it can be confusing, especially when you compare purchasing approaches. After all, does it make more sense to buy directly from a manufacturer or to buy from a distributor?

I, for one, am all about representing self-distributed companies. Not only because I work for a company that directly sells their own products, but because there's something really rewarding about maintaining a long term partnership with my clients.

However, we must recognize that each purchasing type can bring you advantages and disadvantages. It's all a matter of weighing your options - according to your monitoring needs and goals - to find the right choice for you.

Let's dive in and analyze both methods, exploring their benefits and drawbacks.

In Terms of Remote Monitoring: What's the Difference Between a Distributor Purchase and a Direct Purchase?

Buying products from a distributor is a fairly simple and straight forward process. It means that you'll be buying an off-the-shelf remote monitoring device from an inventory.

On the other hand, buying from a manufacturer means that there will be no middle man throughout the supply chain, so you'll be purchasing equipment directly from the manufacturer. This can give you customization options.

Buying from a Distributor: Pros Vs Cons

1. The Pros

  • The distribution channel is selling you one thing: service
    Distributors and wholesalers do specialize in sales and service. They don't have to spend their efforts on developing products, so most of them make sure to deliver you a good purchasing experience.
  • You can purchase in smaller quantities
    Distributors buy in large quantities so you don't have to. If you have just a few remote sites, and they don't require many monitoring needs, being able to buy a small number of devices is very budget-friendly.

2. The Cons

  • Generally not room for customization
    Do you have a fairly unique and intricate network to be monitored? If so, you might want a perfect-fit solution. It's hard to find distributors that do offer this kind of service, simply because they're not the ones in charge of designing and manufacturing the products that they're selling.
  • You might end up spending a large amount of money
    The mantra of distributors is simple: buy low and sell high. They need to sell the products with the highest price tag as possible for profit - developing and managing a sales team is expensive, and distributors will make sure to pass to you some of these costs into your product price. If you think your network is pretty simple and all you need is an over-the-shelf product monitoring equipment, you might want to look for manufacturers that do sell these types of products as well.
  • No upgrades for legacy products
    What happens if you buy remote monitoring equipment, and then 10 years later it still works, but your distributors stopped selling your particular device? You'll be left on your own with no support for upgrades. That means that you'll have a system that doesn't run at 100% and you'll lose visibility of your remote sites.
  • You probably won't get pre or post-sale services
    Distributors have only one main job that is selling you a product. Since they are not able to customize your product, there will be no personalized consultation. Also, since they're not experts on your monitoring device there will be no training or tech support (at least, not with good quality).
  • Possible loss of quality
    Purchasing from a distributor automatically means extra hands on your product. If there's not a good control over how your devices are handled, their quality could diminish as a result.

Buying Directly from a Manufacturer: Pros Vs Cons

1. The Pros

  • Generally lower costs
    One of the main advantages of buying directly from a manufacturer is lower costs. Since the manufacturing companies won't have middleman along your purchasing process, you'll have less costs reflected on the price of your product.
  • Complete control over production
    The manufacturer are the ones that will know your product better than anyone else.
    Full-service manufacturers do everything in-house, so they have a better idea of how to move their sales process efficiently. Since they are on top of their own manufacturing and sales processes, they're able to perform better quality control of your final equipment.
  • You'll get pre and post-sale services
    Buying from a full-service manufacturer also means that you'll have access to people who work with your device and know it inside out. Shopping from a distributor gives you access to people who may know very little about a whole lot. This means that manufacturers are able to offer you pre and post-sale services, such as a personalized consultation, field trial, tech support, factory training, tune-up assistance, and etc. You might end getting more bang for your buck.
  • Better shipping quality
    When you buy from manufacturers, you're eliminating the middleman and intermediate steps from your product's shipping process. Your vendor will be the only party handling your device before you receive it, so they'll total surveillance over packaging and shipping. This aspect is useful to reduce product damages, while also giving you a better idea of what's happening to your package when in transit to you.
  • Give direct feedback
    Buying directly from a manufacturer means that you can give them direct feedback about their products. Thar's also useful when choosing your vendor because you get - or should get - to see insights from other clients about the device itself, not only about the selling process.v
  • Better Guarantees
    Purchasing your remote monitoring equipment from a manufacturer also means that you'll be able to get better guarantees. Ultimately, they are the ones that designed and produced your device, so the best manufacturers should stand behind it.

2. The Cons

  • Customization can be expensive
    Keep in mind that, although manufacturers most likely will be able to create a personalized device for you, this will be more expensive. Having a remote monitoring device designed just for your needs is a luxury, and luxury goods are more expensive.
  • Minimum size order
    Especially when ordering personalized units, you'll be required to put in a minimum order quantity. The costs to design and build your devices might be higher since your manufacturer will have to make sure your order can produce revenue. Some manufacturers will set minimums that are way above your manageable level, so make sure you'll be comfortable with this.
  • Possibly it'll take longer for you to receive your order
    This particular point can be a problem for both the distributor and the manufacturer. As explained previously, it can be an issue for a distributor in terms of depending on the product's manufacturer. This also can be an issue if you decide to buy directly from a manufacturer, because - especially for personalized gear - the device will not be ready to ship.

Which Purchasing Option is Right for You?

Whether you're considering buying direct from a manufacturer or from a distributor, there's no clear-cut answer for which type of purchasing you should choose.

At the end of the day, when making your decision, keep in mind that the right course of action will depend on your specific remote monitoring requirements for your unique network.

If Manufacturers are The Best Option for You, Make Sure to Choose the Best

If you found that your answer is go with a manufacturer, a good way to go about it is working with a company that does everything themselves.

We, at DPS, for example, manufacture and distribute our own products from our headquarters in Fresno, CA. Engineering, manufacturing, testing, and distributing the network alarm monitoring services we provide makes every single step easier and less painful for you.

Our sales engineers are qualified to evaluate your network, and monitoring requirements, to help you decide what's best for your scenario. We make sure you won't end up buying more either less than what you need.

We also know how important it is to give our products a try in your real-world settings, that's why we offer - with the purchase of any of our products - the 30-day, no-risk guarantee. If for any reason, after the initial 30 days, you're not satisfied with our device, just return it and we'll give you a full refund.

So, give us a call today, discuss your unique scenario with our monitoring experts and get started in the path of the perfect-fit solution.

Morgana Siggins

Morgana Siggins

Morgana Siggins is a marketing writer, content creator, and documentation specialist at DPS Telecom. She has created over 200 blog articles and videos sharing her years of experience in the remote monitoring industry.