Best Practices Marketing/Selling to US Government

Hello,

I am marketing fairly generic software to large enterprises. I am now
attempting to market the same product to the US government.

Already, a few US agencies have purchased small quantities of my
product. They have done this without my putting my products on a GSA.

The time has come to get serious and get that GSA schedule filled out.

My questions:

1. Does it matter WHOSE GSA I use? That is, I have a number of options:

a) I could create my own -- but I probably should hire one person to
spend a fair amount of time administering that application process as
well as the schedule itself, once awarded

b) I could find a large outfit -- such as GTSI -- and work hard to get
onto their schedule -- but I fear that all that would happen is that
GTSI would look at my extremely small sales and tell me that, relative
to the other products they sell, keeping me on THEIR schedule costs
more than the amount they need to invest to maintain my SKUs.

c) I could get on just any GSA, just so long as I don't increase their
costs by much.

I am leaning toward option c, assuming that this approach will allow me
to get on a schedule more rapidly and will keep my expenses low.

However, do government buyers care what GSA I am on? Are agencies
required to purchase off of specific schedules, or banned from using
other schedules?

2. Pricing: I assume that the pricing should be formulated according to
the following scheme:

My current list price, minus a discount of some percent. That discount
must be at least equal to, and perhaps better than, the discount I
offer to my commercial customers.

If I use another company's GSA, the price I come up with would be their
"cost." In turn, that company marks up my 'cost' by a certain percent
that is based on the agreement that the GSA holder has with the
government.

Thus, the price the government pays would be equal to my rate card,
minus the discount, plus the GSA holder's markup.

Am I right so far?

3. If so, can I provide points back to the GSA holder? This is common
practice in the commercial world.

For instance, in a commercial setting, I may sell through a distributor
at a discounted price. The distributor may require a "marketing" fee,
which represents his cost of including product in his catalog. In
addition, the distributor may negotiate additional points "on the back
end."

This back end stuff is something I find distasteful. But when working
for other companies, I found that Tech Data put a lot of pressure on my
company to both increase sales, invest in their marketing programs, and
provide several points back at the end of each quarter.

Is this permitted when selling to the US government?

I look forward to your replies.

I am in the same boat and will watch this thread with interest. I was
told by some folks that you need to dedicate a person half-time to keep
up with things and estimate about 10,000 to get on the contract. That
seems very expensive, so I am wondering if they were right.

jjoegall1956@yahoo.com wrote:
> Hello,
>
> I am marketing fairly generic software to large enterprises. I am now
> attempting to market the same product to the US government.
>
> Already, a few US agencies have purchased small quantities of my
> product. They have done this without my putting my products on a GSA.
>
> The time has come to get serious and get that GSA schedule filled
out.
>
> My questions:
>
> 1. Does it matter WHOSE GSA I use? That is, I have a number of
options:
>
> a) I could create my own -- but I probably should hire one person to
> spend a fair amount of time administering that application process as
> well as the schedule itself, once awarded
>
> b) I could find a large outfit -- such as GTSI -- and work hard to
get
> onto their schedule -- but I fear that all that would happen is that
> GTSI would look at my extremely small sales and tell me that,
relative
> to the other products they sell, keeping me on THEIR schedule costs
> more than the amount they need to invest to maintain my SKUs.
>
> c) I could get on just any GSA, just so long as I don't increase
their
> costs by much.
>
> I am leaning toward option c, assuming that this approach will allow
me
> to get on a schedule more rapidly and will keep my expenses low.
>
> However, do government buyers care what GSA I am on? Are agencies
> required to purchase off of specific schedules, or banned from using
> other schedules?
>
> 2. Pricing: I assume that the pricing should be formulated according
to
> the following scheme:
>
> My current list price, minus a discount of some percent. That
discount
> must be at least equal to, and perhaps better than, the discount I
> offer to my commercial customers.
>
> If I use another company's GSA, the price I come up with would be
their
> "cost." In turn, that company marks up my 'cost' by a certain percent
> that is based on the agreement that the GSA holder has with the
> government.
>
> Thus, the price the government pays would be equal to my rate card,
> minus the discount, plus the GSA holder's markup.
>
> Am I right so far?
>
> 3. If so, can I provide points back to the GSA holder? This is common
> practice in the commercial world.
>
> For instance, in a commercial setting, I may sell through a
distributor
> at a discounted price. The distributor may require a "marketing" fee,
> which represents his cost of including product in his catalog. In
> addition, the distributor may negotiate additional points "on the
back
> end."
>
> This back end stuff is something I find distasteful. But when working
> for other companies, I found that Tech Data put a lot of pressure on
my
> company to both increase sales, invest in their marketing programs,
and
> provide several points back at the end of each quarter.
>
> Is this permitted when selling to the US government?
>
> I look forward to your replies.