Is there enough room for one more distributor in Canada?

Some would argue that we already have too many IT distributors in Canada. But D&H Distributing sees room for one more.

The American distributor, based in Harrisburg, PA, just opened its doors in Canada – its first expansion outside of the U.S. This includes a 38,000 square foot warehouse facility in Mississauga, Ont.

The company has been around for 89 years, starting out as a tire re-treading business in rural Pennsylvania. Now it’s an IT distributor specializing in emerging trends across IT, entertainment and gaming, with a focus on the small business VAR.

And this strategy seems to be working in the U.S., with 15 per cent annual growth over the past seven years.

But are there already too many cooks stirring the pot? After all, we have Ingram Micro, Tech Data, Synnex and Supercom – not to mention a number of niche distributors – serving a population of 32 million.

But D&H believes there is room for one more, particularly because it has already been doing business with Canadian resellers out of its U.S. headquarters. While most distributors have operations in both countries, they’re often operated independently, causing logistical headaches for resellers doing business across North America. If D&H can make this process easier, it could reel in Canadian VARs.

Also, Greg Tobin, a former Ingram Micro Canada executive, is heading up the Canadian operations. With his past experience at Ingram, he may be able to take his industry knowledge and fill in any distribution holes in the Canadian marketplace.

Vendor partners include Acer, Brother, Creative Labs, Logitech, Linksys, Buffalo, Viewsonic and NetGear. D&H’s strengths are in the digital home, SOHO and SMB markets, as well as verticals such as education and government. Where it might find early success is in the digital home market, where there appears to be growing interest and a need for solutions. It will also have an edge in CE distribution.

And it’s looking for at least 1,000 new resellers, from system builders to retailers.

For D&H to survive, it’s going to have to offer up something different from its Canadian competitors. The distie says it will emphasis personal service (for example, it doesn’t outsource telesales). And it plans to bring higher-margin products to market before they become commoditized, focusing on best-in-class products rather than carrying all products in all lines.

Its approach is more consultative, where sales teams can cross-sell across different divisions. And it offers reseller training programs, same-day shipping and no application fees for new customers.

It will be no easy feat to gain a foothold here. If D&H is going to survive – and thrive – in Canadian distribution, it has to be at least as efficient as its already-efficient Canadian competitors.

There isn’t much room left for broadline distribution here. But if D&H can win over resellers with its personal, high-margin approach, it could start giving established distributors a run for their money.

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Jim Love, Chief Content Officer, IT World Canada

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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