Mississauga, Ont. –Dan Schwab, the co-president of D&H Distributing, let CDN in on a little secret about the distribution business. I asked him why it seems so many new-to-market vendors choose D&H over other distributors. Schwab said that it all comes down to money. D&H, who is celebrating its 5th year of operations in Canada, said his company does not ask nor demand for any upfront dollars when signing a new vendor.
Schwab said that typically distributors will ask for $100,000 up front for a vendor partnership.
Schwab doesn’t believe, under D&H’s business model that up front money is the best way to establish a new relationship with a vendor especially if all the distributor is doing is fulfillment. D&H attempts to open up markets for new vendors through a demand generation model with a heavy emphasis on services.
CDN had an opportunity to sit down with Schwab at the D&H Canada Tech Show on Wednesday to ask him about HP’s recent moves. HP is a major vendor partner of D&H. And, we also ask Schwab about the anniversary of 9/11. D&H is based in Harrisburg, Penn., and is only a short two hour drive from the Somerset crash. That was the fourth plane, which was speculated was heading for the U.S. Capital Building before it was scuttled by the passengers.
The following is an edited transcript.
CDN Now: What are your thoughts on HP’s recent activity to drop tablets, webOS and split in two? How are you preparing for this as a business and as a business that supports many other businesses?
Dan Schwab: This is a politically sensitive topic. HP is here to stay and that is the message we are delivering to customers. There is confusion in the market based solely on the way HP made the announcement. We are working hard to clarity that but it is a sensitive issue. From our belief, we have confidence in the short and long term that HP has the right solutions and are a key player. They have to decide what to do from a business standpoint and it will not have an impact on the programs and support (for channel partners). So it will not be detrimental on our customer and we are still positive on HP to our customers as we were before these announcements.
CDN Now: It terms of the tablet market you are seeing two kinds of plays; something specific such as the Cisco Cius or the iPad consumer route. How do you see it playing out in the market place?
D.S.: The tablet market is a dynamic category and there are many changes happening such as Google buying Motorola and having their own devices. Amazon will have a tablet. Today, it is a pro summer device and we believe in 2012 tablets will still be a hot category. It will be hot for the holiday season as well. But next year it will be maturing more and with Windows 8 we believe it will make the tablet a business tool. There will be more apps focused on business in healthcare and in retail. So VARs and solution providers can incorporate tablets into their repertoires instead of as an additional devices or a replacement device. Look for new entrants and new form factors along with aggressive price points. Some people may even leave the market.
CDN Now: Your North American Service initiative why did you want to start that, why now what’s going on in the market that you felt you needed to make this kind of a move?
D.S.: Services has been D&H’s differentiator and we do a campaign each summer on it. It has become more apparent in Canada that this model is different and not just better than others; just different and it’s predicated on each customer having a dedicated sales person with, on average nine years of experience, so they are trusted consultants that help with solutions and as distributors get larger the smaller customers become less efficient for them. They have to buy on credit card or through the Internet or have to go through a call center that’s off-shore. The feedback we get is our model is standing out and the basic blocking and tackling is still relevant in sales and we just want to acknowledge that we are different and support our partners. For example, when the recession hit we doubled credit lines. We did not want to be seen as a fulfillment company. We are more of a demand generation company and take vendors to new customers and more markets.
CDN Now: This Sunday is the 10th anniversary of September 11th tragedy. D&H is based about a two-hour drive from the Somerset crash. What was it like that morning? Have you learned anything from it from a business perspective?
D.S.: I remember watching it on TV with co-owners and these events are a reminder we work to enjoy our life and enjoy your work. That is are core philosophy. I read that people stayed at their desks during the horrible disaster and some people decided to not rush out but finish up a project and I like to remind people that there is a balance. When I see an employee hanging around work and I know that there kid has a baseball game or a hockey game that night I say go. One of the takeaways from 9/11 is make sure we have an environment that fosters great work-life with great family life.
