D&H Distributing, an 89-year old IT distributor based in Harrisburg, Pa., is making its way up to Canada.
According to Michael Schwab, vice-president of purchasing at D&H, there are two factors for the company’s first international expansion. The business and the company’s vendor and reseller partners are looking for larger geographic opportunities and Canada made the most sense from a language, currency and geo-political perspective. The second factor was that Greg Tobin, a former Ingram Micro Canada executive, was available to run the business.
“Finding Greg as the individual to become country manager was the catalyst that allowed us to take this expansion,” he said.
Frank Abate, president of Trust Technology Group, and former owner of high profile VAR Infinity Technologies, agrees with Schwab on Tobin’s credentials. “He has a lot of experience and he has been out of Ingram long enough that I think he can open some things up in the market,” Abate said.
D&H Canada opened its 38,000 sq. ft. warehouse facility in Mississauga, Ont. on July 9. The Canadian operation is expected to yield more than 1,000 new, active resellers, Tobin said. D&H’s primary vendor partners in Canada will be Acer, Brother, Creative Labs, Logitech, Linksys, Buffalo, Viewsonic and NetGear. Paul McIlhenny will manage and develop the inside sales and customer service teams for D&H Canada.
The Canadian operations will function with help from the Harrisburg headquarters. Credit and administration will be handled in Harrisburg, while the Mississauga facility will take care of warehouse staff, purchasing and field sales.
Schwab said that D&H plays well in markets such as digital home, SOHO, SMB and verticals such as education and local governments.
D&H’s selling approach is consultative rather than availability and price-based, Schwab said. The sales teams are allowed to cross sell into different divisions. “One salesman can sell the whole portfolio of products as opposed to the notion if you are not trained on CE you can’t sell it,” Tobin said.
With Ingram Micro, Tech Data, Synnex and Supercom already in the market, Schwab understands that D&H has to do things a little different. Part of D&H’s strategy for Canada is to emphasize the personal service aspect of its business with vendors and resellers. For example, D&H does not have any outsourcing of its telesales group or account set up fees.
“We have the ability to execute on vendor initiatives and not (just) our own initiatives,” Tobin said.
Another area of difference is trying to bring technology to market before it becomes a commodity so that resellers can take advantage of the high margins, Tobin said.
D&H’s go-to-market business model will hinge on best in class in all product areas.
“It is full line and not broadline,” Schwab said. “The expectation is for us to carry all products in all categories with monitors, video cards, and memory. That is the business model of the grocery store. The model for D&H is best in class in every segment and fulfilling resellers no matter what the category with strategic lines.”
D&H’s line card has no set number, according to Schwab. He added that D&H will not be defined by its line card. For example, the distributor has Linksys and NetGear in its networking category. “That is all we need in the networking space,” said Schwab, who has been with the company for 20 years.
On average, D&H’s line card per category is less than five and in most cases only two, he said.
Both Schwab and Tobin realize that this undertaking will be a huge challenge. “(We are building this business) from scratch and I would say most of the work is behind the scenes. The IT department has been working from day one so that when we are up and running we’ll be as sophisticated as possible,” Schwab said.
Tobin plans to use inside sales and the Web site to cover the country. “The Web engine is user friendly, while field sales will be geographically based.”
D&H will be able to handle all types of partners from SMB VARs, system builders, the independent reseller and retailer. “The storefront VAR gets lumped into the reseller program without knowing the retail mentality of it,” Tobin said. He plans to change that mentality in the Canadian channel with this role at D&H.
The distributor will be able to ship products anywhere in Canada through its partners, UPS and Purolator.
Tobin is eyeing Western expansion, but only if the economies of B.C. and Alberta continue to grow.
Abate said that if D&H Canada can build an infrastructure and back office that is efficient enough to compete with Ingram Micro Canada, Tech Data Canada, and Synnex Canada then they have a good chance to succeed.
“There is never room for just another one, but there will always be room for a good one,” Abate said.
One program that will not be available yet in Canada from D&H is its Flex Credit program. Schwab said the plan is to introduce Flex Credit to Canada, but more IT work in the background needs to get done before that will happen.
Tobin added that D&H Canada will not discourage credit cards or cash on deliver options for resellers.
D&H also has a successful Summer Technology Show in Harrisburg. This year’s conference had 1,300 VARs in attendance and 120 vendor exhibitors. Schwab said he wants to replicate this type of show in Canada but that no timeline has been set for it yet.
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