A Ledger Story: How Not to Treat Your Distributors

This is the story of how we became and then stopped being a Ledger reseller. Gun, meet foot.

We (Bitfalls.com) had been a Ledger authorized reseller through H2 2017 and into 2018. We started with a measly few hundred units, all of which were rather quick to go. Back then, the devices were cheap to custom-brand (something which was important to me) and I was extremely happy with both their delivery and responsiveness. The addition of our company to their official reseller page was also something to celebrate.

In Q1 2018 a lot of us resellers were removed from the official reseller list without a heads up.

Any remanining stock we had was now dubious as customers no longer had a way of making sure we can be trusted. Coupled with a new flood of discounts from LedgerHQ that lowered the official price down to what we as resellers got, Ledger effectively paralyzed many of its resellers, eating up their margins and making them appear less trustworthy. I was upset to see Bitfalls removed from the list, but happy that I sold all my units and that Bitfalls.com avoided this mess.

I inquired into being a reseller again a few months later because I loved the product and wanted to spread it around in my generally crypto-less area - Central / South-East EU. To be frank, we never made any real money on the devices - maybe 5% markup which at 20k euro purchase price was barely a thousand euro. Add to that Croatia's 60% tax, and you're left with not even enough for half a worker's monthly wages. At that point, however, the Nano S seemingly ran out and to qualify as a reseller you had to order at least 900 units at a significantly higher price than before. This wasn't acceptable to us so we gave up at the time.

Nano 2 or the Nano X

Fast forward into Q3 of 2018, and suddenly Ledger was approaching us again. Would we like to order some Nano S at an amazing discount?

Talking to their reps, I got the price down to 66 euro per unit for 900 units. As we were gathering capital and considering buying the stash - an operation that was delayed because we were organizing the incredible Blockconf - Ledger threw out some oddly appealing Bitcoin-10-year bonuses on their official website - 79 euro per unit. Huh. Suspiciously close to the discount they offered a reseller for 900 units, just a month earlier. Around Black Friday and as Xmas was approaching, the discounts just kept getting more powerful.

At that point it became obvious that they were getting rid of stock. Stock they ordered in insane amounts because the beginning of 2018 saw such extreme demand and a lack of Ledgers. They were only taking preorders for large batches of units, while the crypto market kept tanking. As the preorders were getting canceled, the units were not. They were left with extraordinary amounts of unsold Nano S units, and had to approach everyone they had been dealing with before to get rid of them before they launch their new device.

So... what's the problem? That's normal, right? Offering old stock at a discount when preparing a new device? Yes, if you're up front about it.

To find out about the Nano X, I had to ask straight up, pretending I already knew about it. It was under strict embargo and no one was supposed to know, and it's something I respected until yesterday's reveal. But this information was hidden with good reason - all unsold Nano S stock would end up directly competing with the much more user friendly and wireless Nano X. Come launch time at CES, everyone's Nano S stock would once again become worthless because a) no one would buy them now that Nano X was available and b) the existence of Nano X would mean Nano S has to go down in price - again - this time far below the already discounted 79 euro per unit. And it did. The Ledger Nano S now costs only 60 euro - far below the minimum price they were offering to resellers in Q3 2018.

So by approaching their resellers in Q3, Ledger wanted to set them up to fail again. They wanted to sell them devices at a price that's even now (a mere two months later) undercut by the official one on the site. Everyone stuck with Nano S now has to aggressively peddle them at a heavy discount and, probably, a loss.

This is not how you treat resellers. Your resellers are your advocates to the consumers. They're your partners, not your competition. They're not there to absorb your losses, but to improve your gains. A lot of smaller resellers offer individual customer support for each unit sold, and we do this for a few euro per unit of profit. This is insane in any economic scenario, but we do it because we love the product and we love crypto and we want everyone to be safe. At the same time, we're your buffer toward the populace so you don't have to bother with individuals and can focus on production of hardware and software we all benefit from. What was supposed to be a partnership turned into Operation Human Shield - more than once now.


Ledger will do fine. There will always be more resellers and new customers. The resellers will be fine - we rarely sell goods from a single provider, so we've got other stuff to peddle.

But it's important to realize that entering an exclusive relationship with a provider such as this one can mean setting yourself up to fail. You can be driven by idealism and a desire to do good, or you can do it for profit alone, but unless you take into consideration that a reseller partnership does not imply loyalty, you're setting yourself up for a foot-shooting.

So what can Ledger do? The fair thing to do would be to quit the retail business and allow only resellers to sell their items. But crypto is anything but fair or rational, so things likely won't change. As for us - we'll probably try to become a reseller again, this time focusing on Nano X. It's still a good product that needs to be in as many hands as possible.

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