Disties great and small see growth

A recent report shows profit and opportunity for all European distributors

European distributors experienced huge growth last year, according to a report by PC Europa. Larger firms underwent more consolidation, and margins are increasingly cutthroat, but there?s still room for small distributors to make a buck.

Europe?s top 20 distributors grew organically 37 per cent in 1996, and three distributors ? Azlan, Karma and Target ? doubled their sales. CHS? acquisition of Merisel and Frank & Walter increased the growth average to 59 per cent.

The report attributes the growth to vendors ? notably Cisco and Siemens Nixdorf ? pushing increasingly large volumes of product through two-tier distribution.

Max Hotopf, editor of Distributors in Europe: The Top 800, cites as an example IBM?s decision to push its RS/6000 range through distributors, which included a pan-European agreement with Ingram Micro.

The survey shows that 16 of the top 20 European distributors, are either stock market quoted or part of larger companies. This maturing process has occurred quickly, as a few years ago almost all were owned by founder entrepreneurs.

But the research confirms that many small distributors are thriving, with 52 companies with sales of more than $100 million and 189 with sales of over $50 million.

Hotopf said: ?It is a myth that these people are being driven out of business by Ingram and Computer 2000. There are plenty of national box-shifters beating the international distributors at their own low-margin game.

?There are also plenty of new markets in the intranet, internet and even the home market for the clever entrepreneur.?