Indirect Channel Distribution on the Rise for RFID Transponders

Increasing need for "solution providers" will drive greater sales through VARs, system integrators, VDC predicts



Influx of Solution Providers

  • OEM/private label channels are more widely used for shipments across regional markets, with larger RFID manufacturers shipping their products to partners for further packaging and customization; however, shipments through VAR/SI channels are expected to seize the largest share of the market over the long term due to software and services revenues;

  • Dealer/distributor channels account for the smallest share of hardware revenues, largely due to the low value-add offerings of dealer/distributors and their interest in moving boxes (which is difficult with non-standardized, non-off-the-shelf products). Dealer/distributor channels are widely being used for transponder shipments to support applications such as animal identification, security/access control cards and automobile immobilization; and,

  • A primary issue currently facing the RFID industry is a general lack of qualified RFID resellers and integrators that can effectively market, sell and implement EPC supply chain solutions; however, vast channels exist for closed-loop, traditional application markets such as security/access control, contactless smartcards, library systems, fixed-asset tracking in specialized sectors (i.e., health care), etc.

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