Last updated: 19 March 2015
Brazilian companies show some specific preferences when buying business software. In this article we will highlight the most common procedures applied when acquiring software and show how to establish an ideal commerce channel to handle these operations.
Direct Sells VS. Software Resellers
Brazilian companies have a predominant tendency to acquire business software through resellers rather than deal directly with the development companies. This has led to the growth of a large market for software distributors in the country, who specialize in dealing with company representatives in face to face meetings before presenting them with the option to acquire software products.
Data by the Brazilian Software Companies Association, or Abes, indicates that there are currently 5,500 value added resellers in the country or over 49% of companies in a sector that generates close USD 25 billion per year. The actual causes for this general preference can be related to multiple factors.
When surveyed, one of the key reasons that Brazilian companies order software from resellers was found to be the payment options provided.
A considerable portion of Brazilian company representatives and CIO’s do not have access to corporate credit cards, which severely limits the options to purchase products directly through vendor websites. Software resellers usually accept a greater number of payment methods, which furthers their reach towards company representatives who have limited options for dealing with these transactions.
One method commonly prefered by these companies is payment via invoice, which is referred to in Brazil as Fatura. Unlike the Brazilian Boleto Bancário, this type of payment allows for company representatives to pay transactions through any bank and without an imposing date limit.
Brazil is a country where face to face meetings and personal connections have historically been very important. It is therefore no surprise that although times have changed many companies still impose policies where software and services are only acquired through personal meetings with a sales person. Even purchases that are limited to a few hundred dollars can require face to face meetings and signed purchase agreements.
Direct Sales and Multi Channel Software Stores
Even though business software reselling is a predominant tendency in Brazil, there is a growing number of companies interested in acquiring these types of software directly, whether to avoid the increased prices of resale or the unnecessary bureaucracy of dealing with sales representatives after doing the research on their own and choosing the software that best fits their needs.
Software vendors should keep this market in mind when offering their products in the country. The option to establish Private/Public combined channel stores should prove to be the best option to deal with both markets with some necessary adjustments to guarantee their efficiency.
One way to minimize channel conflict between direct sales and reseller sales is to limit the payment options available for direct customers. Only accepting credit card payment for direct customers, while referring all orders with other payments methods to resellers is often seen as a nice middle ground.
For the software vendors this means both a reduced risk but also less management as resellers will take care of payments by Boleto Bancário and Fatura, or invoice payment.