Join the distribution debate

The value of distributors should not be underestimated

As a small but sophisticated vendor of IT security software, DeviceLock relies on its first tier partners including distributors and value added distributors for their knowledge of the market place and their own reseller networks, especially in the regions where we do not have local offices and experience. The primary value they offer is therefore providing an immediately available channel through which we can target our customers. Building a channel infrastructure of a similar size internally would usually require significant investment of time and resources. Our partners also support us by providing pre-sales support for their own resellers for example technical demos, consulting and test installations etc to our prospects. This brings me on to the third and most valuable benefit that our partners provide, which is frontline technical support for our customers, thus saving the time and man-power of DeviceLock's own technical support departments. It is also worth noting the support distributors provide in simplifying business processes such as ordering and invoicing and in product marketing by participating and often leading in regional and national PR and marketing activities which we often share the cost of.

Posted by Sacha Chahrvin, Managing Director of DeviceLock for the UK and Ireland | 04 Oct 2010

There's opportunity for all....

providing of course that each Distributor is very clear about their role and where their strengths lay. Distribution in the UK has significantly helped Check Point in growing our business over the last decade.
In all of this we shouldn't lose site of the customer. In all but the smallest of organisations there are a number of individual customers to be marketed to, often serviced by resellers with specific skills and competency. It follows that 'Value Add Distributors' may be able to address focus areas therefore better than the larger ones. In short whilst the larger Distributors can offer significant advantage it may be that the more focussed may help with more specific opportunity. A vendor needs to understand their proposition to end customers and determine the most appropriate type or mix of partners to facilitate this. Then and only then can we as Vendors determine ann appropriate model.

Posted by Terry Greer-King | 08 Sep 2010

Medium-sized distributors can be fleet of foot

Unlike many of its rivals, Nimans has evolved into a fully converged distributor from the voice arena, developing its business from the opposite end of the voice/data industry over the last 30 years. The resulting experience, heritage and depth of customer relationships is difficult to recreate.

As a 100 per cent reseller-focused company we continue to gain market share with data VARS as we are ideally placed to help them capitalise on many new revenue opportunities that convergence creates. As the communication landscape has evolved, so has our skills base and product portfolio.

Nimans is much more than a voice distributor; we supply a complete range of technologies - from systems and peripherals to support services such as leasing and networking, as well as installation, hosted telephony and the latest unified comms solutions.

As a medium-sized distributor we are able to provide a fleet of foot service. What makes us different is that we have developed from voice into a fully converged distributor with the appropriate skills sets, expertise and service levels, based on three decades of experience. We are ideally placed to help our customers grow further.

Posted by Richard Carter, business development director, Nimans | 20 Aug 2010

Adding Value

Yes, the big four will dominate but there will always be a place for local specialists. Distribution is not the one-dimensional beast it once was, all distributors now need to add greater value. At Datapoint, we use Westcon to support our communication system integration business for clients across Europe and globally. Westcon provides additional value such as skilled technical staff and services as well as maintenance. Similarly, there is still a place for local specialist distributors to add value and provide greater choice in the market.

Posted by Paul Brewer, Director of Technology Solutions, Datapoint | 19 Aug 2010

Distributors with both a global footprint and specialist skills will win through

There is certainly room in the market for both specialist and global, broadline distributors. Each provides its own function, whether that is being able to provide credit to the channel or build a market for an emerging technology.

Over the past two or three years, we have seen a trend toward end users wanting to consolidate their global supply chain by reducing the number of partners they work with and cutting the associated costs; a distributor with a global footprint is well placed to assist with this, as resellers can leverage this infrastructure. A distributor that is flexible in dealing with different currencies and has an understanding of local taxes and logistics will also be key in this kind of environment. This type of infrastructure and business model is generally more common with the bigger distributors, so this is one area they are likely to excel.

On the other hand, with technology moving so quickly, distributors that are agile enough to keep pace will deliver exciting new opportunities to the reseller market. Emerging technologies will require much evangelising and skills such as technical, marketing and sales support. The ability to assist partners in the entire sales cycle from initial enquiry through to deployment and ongoing support is really important to get the sales traction that is required to build markets. Local specialists can fulfil this need whereas the business models of the 'big four' will make it more difficult for them to achieve this.

Distributors that have a mix of both a global footprint and specialist skills will be best placed to continue to thrive in the current, rapidly evolving distribution market.

Posted by David Ellis, Director of New Technology and Services, COMPUTERLINKS | 18 Aug 2010

Is there need for a debate?

There is a place for publicly and privately owned, multi-national and domestic broadliners as well as for specialist distributors.
The need for, and long term success of, any particular distributor depends on their ability to consistently meet the needs of their current and potential customers rather than the type of business model they operate.

Any distributor that fails to deliver what is required of them by both their suppliers and customers will not succeed.

The high street shows us that there is the need for choice. Not all brands want to be sold in a mass market superstore and not all consumers want to shop in one.

Tesco is a truly impressive organisation but their success and scale has not forced Sainsbury's, Waitrose or my local butcher out of business. Rather they have invested, re-shaped and consequently improved customer satisfaction to ensure their own success.

There is no reason why well run and relevant distributors of all types will not continue to serve the needs of IT resellers for the foreseeable future.

Mike Pullon
CEO Varlink Limited
Mobile Computing & Data Capture Product Distribution
www.varlink.co.uk
www.eposdistributor.co.uk

Posted by Mike Pullon, chief executive, Varlink | 13 Aug 2010

It's not inevitable

The big four do certain things very well - logistically they are very slick and they invariably have best-of-breed online ordering systems - precisely because of the levels of investment they can and do make in infrastructure.

However, it remains a fact that people still tend to do business with people and it's in this area of the sales relationship with the reseller/retailer/etailer where local or European-based disties win out, because of their better contact with and knowledge of the individual sales channel's requirements.

In the better of the local disties, this customer-centric approach often combines with a more in-depth product understanding that is not typically found within the ranks of the global broadliners - it's understandably hard to demonstrate specialist knowledge in the entire product portfolio when one's goal is to sign up every possible distribution franchise going.

So the big four will stay big and may well continue to pick off local outfits that don't have any particular USP. But I'd still bet that we'll see well-adapted local distributors operating happily for some considerable time to come.

Posted by David Hennell, commercial and business development director, Formjet | 12 Aug 2010

Big Four are running faster to stand still

If you look at Europe, there are a lot of independents. There are two types of organisation: European organisations, like ourselves; and domestic players in each country. What the Americans have done is picked off those individual distributors in each country. They do not seem to be buying up the Europe-wide organisations.

A lot of our domestic competitors have been swallowed up. Avnet, Arrow and Tech Data have been the main culprits. They are swallowing everything that moves at the moment, because the dollar has been strong. And, because they are not growing in their domestic market, they are out there swallowing up companies in Europe and Asia. They are forced to look into Europe and find medium to small business to provide some growth. They are running faster to stand still.

And, if the dollar weakens, that is when things could get much more expensive for them. Their domestic market is not growing and Asia is quite a difficult area for Americans to move into.

Posted by David Galton-Fenzi, group sales director, Zycko | 11 Aug 2010

The big four will get bigger

The big four are getting bigger and I do not think there is that much room for another distributor to get in. The reason smaller distributors exist is to be really niche or vertically focused. But how many people can afford to make the investments that Tech Data make?
There are too many small distributors that are not very focused. There is a great need for small, very focused vertical specialists. But, at some point, the shareholders and the founders of the successful ones will want to sell up.
Very few companies can bridge the gap to become very big companies. The big four will continue to invest and get bigger. Unless the smaller players have a USP, they are going to find life very challenging.

Posted by Ian French, strategic development director, Azlan | 05 Aug 2010

Niche distributors will continue to thrive

Certainly size counts in the broadline space and further consolidation is possible amongst the top distributors. Mid-sized distributors struggling to compete with broadline may see the acquisition of smaller niche distributors as a solution, but I remain convinced that stand-alone niche distributors will always have a place in the channel. Resellers want to deal with knowledgeable sales people they can trust and vendors launching new products/technologies want the services of a proactive distributor who will focus on product and market development. A broadline distie chasing revenue cannot offer that consistently. At Getech we do the basics right , deliver the right product at the right price to the right place, but the single most important factor for our success in our chosen field is the product and market knowledge we have built up, through our sales and technical teams. That experience counts and resellers take confidence in knowing our advice is genuine, honest and accurate. Ian French is right - small, unfocused distributors will struggle, but the future for competent niche distributors remains strong.

Posted by Guy Watts , Sales Director , Getech Ltd | 05 Aug 2010

Yes, but there will always be a place for local specialists

Certain global vendors will want to take a broadline approach, however there are several vendors who will not consider appointing a broadline distributor. Instead they rely on local distributors with a specific skills set to take their products to market. This is a particular skill a broadline distributor does not always have due to the sheer amount of products they carry.

Posted by Chris Walsh, sales director, Arc Technology | 04 Aug 2010

Customers and vendors will decide

As with all questions about globalisation, it is often money that talks. However, if Westcoast can continue in the top echelons of UK distribution, there must be two reasons:
1. Customers want to do business with Westcoast. I don't think they do business with us becuase we are British but because we offer outstanding value and sales focus.
2. Vendors want to do business with us because we have a limited number of brands and focus on them, bringing their value closer to our reseller customers.
The reason we are still British is because we have an entrepreneurial owner that wants to stay independent and it is these traits that flow through the entire business from top to bottom.

Posted by Alex Tatham, sales and marketing director, Westcoast | 04 Aug 2010