When was the last time a major distributor opened up shop in Canada? If your memory is foggy for an answer don’t worry because you are not alone.
When D&H Distributing, an 89-year old IT distributor based in Harrisburg, Pa., decided to extend its business north of the 49 parallel, it was historic for this industry.
Leading the charge from the Canadian end was Greg Tobin, a long time Ingram Micro Canada executive. On the U.S. side it was Michael Schwab, the vice-president of purchasing at D&H. Schwab saw that his vendor partners and his reseller customers were already looking into larger geographical opportunities.
Canadian expansion made the most sense for D&H because of its close proximity to the U.S. and because the primary language spoken was English.
The second factor, according to Schwab, was finding a knowledgable executive such as Tobin to execute the plan and run the operation.Tobin could not have imagined being in charge of a large distributor two years ago. But he started down this path as early as February of 2006.
“It’s been kind of a whirlwind. A real Cinderella story. So many things have happened. There have been so many milestones and achievements such as our first order. Then it was our first significant revenue target. Then there were new vendors coming on board. We celebrated our 500th customer and now we are up to 800 in only five months,” he said.
D&H’s first year goal was 1,000 customers. They also have 90 vendors. The subsidiary started with vendor partners such as Acer, Brother, Creative Labs, Logitech, Linksys, Buffalo Technology, Viewsonic and NetGear.
D&H Canada opened a 38,000 square-foot facility in the Toronto suburb of Mississauga in July. The opening was met with some disbelief, healthy skepticism and even predictions of failure coming from the IT industry in Canada.
But if there was any validation that D&H Canada was here to stay it came from Cisco Systems Canada. Late last month, Cisco Canada signed a distribution agreement with D&H Canada to go after the SMB-sized market in Canada.
Tobin called the signing a ringing endorsement. “We are for real and we are staying in this market,” he said.
Tobin acknowledges that the IT industry expects things to happen overnight and having that mentality makes it hard to stick to priorities.However, if D&H Canada does not stick to those priorities the balloon could very well burst, he said. “My journey here is about milestones and those happen in six months, in three years and five years. Everyone wants us to be a broadline distributor in a few months, but that is dangerous,” he added.
For now, Tobin will be sticking to company priorities and hitting milestones.
In 2008, he wants to improve the communications piece of D&H Canada’s operation. For example, the subsidiary’s line card has tripled since the July opening. Some resellers have no idea D&H Canada has so many vendors on board, Tobin said.
“We need to work on that starting in January of 2008,” he said.In comparison, other distributors will issue a press release every time a new vendor is signed. If D&H Canada did that, Tobin would have had to sign off on 60 press releases in five months and that would have led to over saturation and turned customers off.
Marketing will be a big priority for Tobin in the New Year. D&H Canada plans on developing many unique vendor marketing initiatives, such as call to action drives for resellers. There will also be a heavy emphasis on PC retailers, independent retailers, SMB VARs now with Cisco in the fold, system builders and the education channel.
Also part of the mix for 2008 will be D&H’s U.S.-based credit programs. Tobin wants to bring those to Canada.
“I want to work on being flexible, in the market. They do not have enough credit in the SMB. The more I can do to be flexible, the more they can believe in me. The more I can do for them, the more they will do for me.”
Quarterly promotions with call to action plans will be made available by the first quarter of 2008 Tobin said.
Schwab said that D&H understands they have to do things differently in a market that already has high profile distributors such as Ingram Micro Canada, Tech Data Canada, Synnex Canada and Supercom.
“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,” Schwab said.
So far the glass slipper has fit in the Canadian market for D&H. Tobin is working so the clock does not strike midnight.
