Posted by: peterhact | July 15, 2010

Distribution from the eyes of an ex-reseller….

Four years ago, if you had suggested to me that I would be in distribution right now, looking at leaving and going back to a reseller to take a new direction in my sales career, I would have thought that you were mad.

Distribution? Come on. Why would I want to join them?

At the time, I had a great job and was looking forward to the birth of my sons. We were expecting twins, and, eventually, as the costs mounted, I found that I had to find another job as my current one was falling short of my monetary requirements.

Every sales person who has been doing the ICT game for a while has a trusted recruiter, someone who knows you and what is the best fit for you. I had a great recruiter in my corner, and it wasn’t long till she had found a great job for me.

The only snag was that it was working for a distributor, something that I had never, ever considered, and the particular company had, in my eyes, dropped the ball after one of their long serving managers had left. But hey, it was more money and after meeting the current manager, it looked like I could work there.

So I left reseller-land, and started playing with the big boys of distribution. The pre-conceived ideas I had went away really quickly.  There are many things you believe  “disties” do, but I can tell you, most are completely wrong.

I will name the company I am leaving in a moment; it isn’t anything to do with them as to why I am leaving. I just need to re-assess my career, and the direction I want to take seems to be best suited in a reseller environment.

Before I do, I thought it might be of use to the reseller community to understand a few things about, and ways to interact with the distribution companies.

Distribution is based on the concept of providing a method for manufacturers to engage with multiple resellers without having to support them directly. The manufacturer provides pricing, stock where applicable and support to the distributor, who then provides it to the reseller, who then resells the product to the end user. Manufacturers may have multiple distributors, or they may only have one. This is, ultimately, the manufacturer’s decision.

A distributor may have thousands of products, many brands, and a lot of knowledge in the technology that they sell, or they may have only a few brands, and a greater understanding of each product from those brands.

The level of product knowledge is dependent on the size of the brand stable the distributor may have. Many know their products very well; others may not. This becomes part of the value that the reseller can gain from particular distributors.

The cost of goods from a distributor can vary, but this isn’t based on the need to make a profit, it is based on the discounts applied – and whether the reseller is engaging with the manufacturer to ensure that they are at the front of opportunities. Every distributor will recommend that you engage with the manufacturer – you can gain product knowledge, certifications, access to joint marketing for events, and even leads.

The distributor may be engaging with multiple resellers for a large opportunity. One myth is that the distributor passes all the other ideas on to one particular reseller, be it a favourite or a parent company. If the same opportunity is being quoted, each reseller receives their own quote, not a blanket one for all. The reason that this is done is that each reseller may interpret the requirement differently, perhaps providing innovation or diversity in their response, and it isn’t fair to provide this information to all the respondents, if their solutions are different.

One thing that I have learnt is that price is the least important factor for an end user. If you are the cheapest, but you have no stock for at least a month, you may lose the deal to someone else that has the stock, and a higher price. To tip the balance in their favour, distributors make an educated guess and carry certain brands in stock. The amount of stock depends on the company, but for most part, they carry the easiest stock to move.

Here is what I have learnt from working in distribution:

  1. In order to succeed in the ICT Industry, resellers need to align themselves with a certain distributor. Find a niche or core product, and base your business on that product.
  2. For a reseller to succeed and gain greater discounts from a manufacturer, certification is required. All distributors can assist with certs, as they gain a better reseller sales force when they are educated.
  3. Distributors are always there to help. Many have licensing teams, presales teams, and support in the form of Account Managers, BDMs and Managers for escalation.
  4. Identify and appreciate the value adds that particular distributors offer.  Each have unique value add propositions, and these value adds can be utilised to enable the reseller to grow their business, with less effort than by attempting to do things yourself.
  5. Be specific in the requests that you send in to a distributor. If you ask for “switches”, be assured that you will be asked which brand, what size, etc, etc. This is a waste of your and the distributor’s time. Better to contact the presales team and ask for some advice.
  6. When ordering, provide all the information, don’t hold back and keep anything from them, you will be asked for it later, especially if it is important to enable the order to be processed.
  7. Always remember that the distributor is there to help you. If you hold out on a special low, discount price, and still don’t win the business, it is worth speaking to the distributor to see what you could have done differently, apart from a lower price.
  8. When asking for a special price for your client, tell the distributor all of the information that they ask for. If you hold out on the name, the contact, the address, you may find that another reseller beats you to the deal, with an additional discount above yours.  They would have got this from the manufacturer, after being able to show that they were working in the account. If you are the incumbent, and are beaten off by another reseller, it may be that you didn’t give the distributor enough information.
  9. If you have an account manager assigned to your company, meet with them regularly. Not only can they update you on product trends, but they can also let you know about the market – some account managers find out about company mergers, companies that have decided to close, who have moved where, and what new promotions are coming up.

10. Distributors are there to help you. But they need you to achieve their goals, otherwise they won’t be around much at all.

The company I have been working for is Express Data, they won the Hewitt awards “best of the best” employer this year, and are always winning industry awards from the manufacturers. They are a strong, vibrant distributor, they aren’t everything to everyone, but they are innovative, and their brands are mainly niche products for the changing market place.

The reseller I am moving to is allowing me to sell solutions. Something you just can’t do at a distributor, adding many parts to make a complete end to end story…

Advertisements

Responses

  1. In this event, Resellers must have a good working knowledge of the product before they commence with a Reseller Subscription. Distributors Parts Wholesale


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: