How is it that Australia has 80 distributors, while in Canada we have just a handful that survived the past few years?
We saw the disappearance of Merisel and EMJ Data Systems in what was considered an over-distributed market in Canada – which serves our population of 33 million. This trend toward consolidation has been happening all over the world, particularly in Europe and the Asia-Pacific region.
Except, apparently, for the South Pacific. Australia has a mere 20 million people in a smaller geographic area than Canada. So how does it support 80 distributors, and why haven’t all the little guys been snatched up yet?
Of course, Australia has the regulars, like Ingram Micro, Synnex and Avnet, but most are smaller niche distributors that we’ve never heard of in Canada, located in some of the lesser-known locales.
AustSTOR Data Storage in Gosford, for example, specializes in data storage – specifically data archival. Dicker Data, in Taren Point, distributes hardware, such as servers, storage and notebooks. And WhiteGold Solutions, in Frenchs Forest, provides secure infrastructure solutions, including managed services.
Even New Zealand, which consists of two main islands (and a third smaller one) and a population of around four million, has more distributors than we do in Canada. Auckland alone has 15 distributors, with another five in Canterbury and Wellington.
Yet, these South Pacific nations have managed to avoid the consolidation we’ve been seeing everywhere else. In Asia, some of the bigger disties have swooped in and made acquisitions to strengthen their position in the region. And Avnet (among others) has been on an acquisition spree all over Europe.
But then consider the potential markets in both Asia and Europe – they’re huge. China and India alone make up a third of the world’s population. Europe is also a thriving market, especially with the potential for business in Eastern Bloc countries. So it makes sense that the bigger disties focus their efforts there.
In Canada, our close proximity to the U.S. has affected the way many global firms do business here. Ingram is a good example – the distie decided it made more sense to run its North American operations as one, as opposed to having a separate Canadian entity.
How many times does Canada get lumped in with the U.S. or Latin America?
I’ve never been entirely sure how doing business in Canada is directly comparable to doing business in, say, Mexico or Brazil.
So, because of their small populations and geographic isolation, it seems Australia and New Zealand have managed to escape the consolidation the rest of the industry is going through. It’s hard to imagine there’s actually a need for so many distributors, but there could be a good reason why they’ve survived.
Many of these smaller South Pacific distributors say they take a hands-on approach to dealing with their reseller partners, and many provide some sort of value-add, such as higher margins, fast turnaround, dedicated account managers, extensive support, training on new products and wholesale managed services.
It’s perhaps those more personal relationships that have kept them in business – something that some resellers in Canada feel they’re missing out on these days.
