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Re: A Chicago Giant falls

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Tim Wilson
Re: A Chicago Giant falls
on Nov 4, 2011 at 5:17:15 pm

[Neil Hurwitz] "Just what value does any reseller add?"

If you need to buy one camera, or set up one suite, or can hire Bob Zelin, then no, a reseller doesn't add much.

But Roscor specialized in things like schools, churches and independent TV stations -- multiple systems, often placed into facilities with no IT or other appropriately skilled staff. These customers want single sources for mics, monitors, edit systems, storage, cabling, so when something went wrong, they made one call, and it was taken care of. There, having a dealer is invaluable.

There's rarely one single reason a company goes under, but the perilous business model isn't on the sales/service side, or even rentals, but the equipment side of the industry that runs on credit.

Most of the time, this works out well enough, but those net 30 deals became net 90 years ago, and some deals go out 6 months or more. Cash flow has slowed to a trickle, and if one or two deals go belly up, then a whole supply chain collapses.

I don't have any knowledge of this personally, but in reading comments from Roscor employees elsewhere, they extended ONE YEAR terms to a TV station they were outfitting in Indonesia, and well, you can guess the rest.

I'm not meaning to comment on the specifics of Roscor, though, as much as to observe the market forces that keep companies like them around -- one stop shopping and service for small-to-medium non-specialist facilities, a business that's growing in many parts of the country -- and the forces that threaten companies like them, a global credit crunch that leaves everyone vulnerable.

The only specific observation that I'll make about Roscor is that the individual guys I dealt with in Chicago and Detroit when I was at Boris and Avid are aces, some of the nicest guys in the business. I hated hearing about this.

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