It would be amazing if 12 different Technology Manufacturers all wanted to operate an evaluation program, that was closely ingrained with their own Sales & Marketing activities, in an identical format, and with an identical commercial deal. It definitely would be amazing as the reality is that we have almost got 12 different deals in place for 12 Vendors, each one a careful negotiation from a range of options on key topics . 

The basics are : 

1. There are COSTS associated with organising evaluations, and the costs can vary dramatically in some key aspects.
   • Transport costs and storage costs are much higher for the physically large products.
   • The re-imaging cost can vary across different computing products, depending on the time required to complete the process
   • The cost for printers needs to include the cost of replacement consumables
   • The cost for an unbox, set-up and take away packaging service, (if that is required) are greater than if the delivery experience required is just a simple hand over at Goods In.
2. There is a cost associated with inventory depreciating from its value as new, to the value it can earn at the end of its life in an evaluation pool, and this can greatly influenced by the value of warranty entitlement that has been eroded.
3. There are RISKS…that the equipment will be lost, damaged…or, for whatever reason, fails to generate any value at the end of its life as an evaluation. 

A major consideration in constructing the commercial arrangements around an evaluation program is whether the Manufacturer wants to fund the costs as an expense budget item, and whether it wants to retain the ownership of the equipment in the loan pool and take the inventory depreciation cost, and indeed be responsible for selling the equipment themselves. Whether or not this makes sense for any particular Vendor will probably depend on whether there is easy access to Refurbishment and Resale organisations for the Vendor’s brand.

The alternative is to choose a Partner, like the AD EVALUATION TEAM, who is prepared to invest in the evaluation equipment, and thereby absolve the Manufacturer of the issues of loss or damage, and indeed the issues around selling the equipment at the end of its life in the evaluation pool. In such an arrangement the Partner has to fund the depreciation cost, as well as the risks, and so a discount will be required to make this of interest. If that Discount is increased some of the loan costs can also be funded. If the Discount is increased some more, all the loan costs could be funded …. As long as the units in the pool have a high enough ticket price that the discount matches well to the cost of loans, and as long as there is a firm agreement on the period of time that equipment is available for use in an evaluation pool.

THE AD EVALUATION TEAM currently has contracts with Vendors to provide a full evaluation service that are based on: 

1. Inventory provided F.O.C …so no inventory ownership… charge a loan fee
2. Inventory ownership… purchased at a medium discount, supplemented by a loan fee
3. Inventory ownership… purchased at a deep discount, no loan fee
4. Inventory provided F.O.C …so no inventory ownership… loan fees are funded by being allowed to sell the equipment.
 

So, in fact there is an endless mix of possibilities.