Describing the Customer’s Costs
TYPICAL COSTS FOR INTERMEDIARY CUSTOMERS: GUARANTEE STEPS
Intermediary customers are those commonly termed "channel" customers. Intermediary customers include wholesalers, retailers and occasionally, brokers. These Intermediary types of customers see that the product is sold and delivered to a Final customer.
Intermediary customers take four major steps with the product:
Obtain, Sell, Guarantee and
Return. Each of these steps cause an Intermediary customer to incur additional steps and costs in connection with the product. Some of these additional costs include:
C. Guarantee Steps: Guarantee steps include the activities required for the Intermediary customer to keep the product or service in working order for the Final user. These activities include both problem assessment and correction.
Set guarantee: The customer must establish his warranty of the product and the services which he provides to support it.
Assess Final user problem: When the Final user has a problem, the customer must determine the nature of the problem, alternatives to solve it, and the cost of the solution.
Correct Final user problem: The customer must correct the Final user's problem.
Accept product returns: Where necessary, the customer must accept product returned to him from the Final user.
Credit Final user for returned product: The customer must credit or repay the Final user for any product the Final user returns to him.