D&H Canada held its second annual Technology Show and Fun Fair event in Markham, Ont. on Wednesday.
Greg Tobin, general manager, D&H Canada, said when the distributor hosted its first event last year, reseller attendance was expected only to be around 150 partners. The attendance ended up topping 300. This year, Tobin said D&H Canada was forecasting a 15 per cent attendance increase over last year, with about 40 new partners.
One of the key messages that D&H executives gave to the resellers that attended the event was to remain focused, innovative and optimistic in their businesses during these challenging and changing economic times.
CDN had the opportunity to speak with Tobin one-on-one for an interview where he spoke of D&H’s business in Canada, the reseller and vendor community and discussed future plans.
CDN: D&H Canada has seen significant growth in its first two years in Canada. Tell me about that.
Greg Tobin: We’ve just completed the end of our first quarter in our third year. In year two, we saw 212 per cent growth and we’re planning on growth of approximately 45 per cent for the full year. We’re ahead of that growth curve at about 56 per cent growth. We’re seeing growth across the board; we’re seeing anywhere from 60 to 80 brand new customers per month that come on board and we’re projecting approximately 800 for the year. We’re seeing growth in the mobility area with notebook growth in the range of 97 per cent growth year over year. We’ve also seen over 100 per cent growth in the storage area and that’s an area where we expect to see continued growth in. We’ve also seen wired networking growth in the area of 37 per cent growth and fixed line growth is approximately 55 per cent. The Flip camera is also showing solids level of growth with 40 per cent market share in the U.S. We’re the exclusive distributor for that product in Canada.
CDN: What technology areas are not seeing growth and what can resellers do to improve this?
G.T.: The largest section of our business is being fuelled by SMB. The numbers from the Conference Board of Canada show that although 404,000 jobs have been lost (in the economy), 102,000 self-employed jobs have been created at the same time. So even though the Fortune 500 companies may not be hiring right now, we’re seeing a lot of growth in the SMB area. We’re seeing people that have taken control of their own destiny and are starting their own companies. They start off their company and they require IT products. So even though the economy may not be as strong as it needs to be and there are certain areas that might not be growing, we’re finding growth in just about all of the areas that we’re able to see and we’re very encouraged by that. We’re encouraged by the fact that eventually the Fortune 500 jobs are going to come back. It’ll take a while, but as long as we’re growing based on the net new jobs being created, we’ll be well positioned. That’s one of the messages we give to our reseller partners. Make sure that you’re well positioned to take advantage of those net new jobs that are being created. It might be two to three people who are starting off a business, but no one starts that business with the expectation that they’ll remain small.
CDN: How many reseller and vendor partners does D&H Canada have?
G.T.: In terms of the reseller partners, we have a little over 2,000 that do business with us. We have about 800 that will come on incremental in the calendar 2009 year. Predominantly, it’s all SMB in terms of quantity. These are new people starting up their operations with us and we don’t charge a fee for set up to take care of them. Every customer, regardless of size, big or small, will have their own dedicated representative that handles that account. That level of intimacy is very important. We also find that unfortunately there are resellers that open up and go out of business. We found that number is less than 10 per cent that happens each year. We want to make sure we’re on top of that and understand that when people start off their operations, they might not have full credit capabilities. We’re there to help them grow that. They may want to start off using credit cards with us. That’s something we can facilitate and as we earn the respect for each others’ business models, we understand their business and their payment patterns and we hope to move them to terms and extend them the credit that they need in the market.
CDN: What’s D&H Canada’s vendor strategy?
G.T.: Typically we look at our line card by category in terms of what solutions our reseller customers need and what they, in turn, can sell to their customers. If there’s a certain category that we need to grow, we bring in a vendor and bring their solutions on board. For instance, we didn’t have a lot of glass or monitor vendor partners and we believed we could comfortably bring on the BenQ line and support and grow that without detriment to our existing manufacturing partners. That’s important because we don’t want to dilute our focus and we want to do the right thing for our vendor partners.
CDN: What’s D&H Canada’s growth and channel strategy as we move into the 2010 year?
G.T.: Our strategy for the Canadian market is we want to make sure we remain true to our customer, SMB. That will always be within our DNA, so making sure we’re aligned with the small resellers. I’d tell you that we’re predominantly more with the S than the M and the B. Our sweet spots in Canada are doctors’ offices, accounting offices, medical clinics and businesses with 25 seats or less.
We’re also seeing a lot of growth in the e-tail side of things. You’re seeing more retailers selling IT products and consumer electronics products over the Web, or their Web based portal. We also see as the price points of minis dropping, we see an extended and a widening base of youth applications, so that’s an area we want to make sure that we’re making sure we’re taking care of all post-secondary opportunities as students are using products as well. Education, the SMB, and the e-tail areas are all very important to us. Also independent retail is another area we’ll be focusing on. These are the smaller organizations that used to manufacture white boxes. In a lot of cases, their world has changed. It’s not as profitable for them to turn the screws on a white box anymore. They have a walk-in store presence and a good loyal group of customers. We’re helping them with merchandising products. So a typical order we might get from them on any particular day, might consist of: I need two Flip cameras, I need to have two digital picture frames, one camera, two printers, one notebook and three cables. That’s the type of order we’d get from these small independent PC retailers. The SMB, PC retailer, educational channel and the e-tailers are part of our strategy moving forward.
CDN: Is D&H Canada doing anything differently when it comes to extending credit to resellers now?
G.T.: What we’ve done is in the first pass, we’ve extended credit for hundreds of our customers. The condition was you had to be in good standing with us, so paying your lines down, you’re not stretching us, but providing you’re paying your lines down and are hitting or utilizing your line, we reached out to hundreds of them and increased their credit lines from $15,000 to $50,000. That was a good initiative that we did and it rewarded us in terms of customers telling us that’s what they needed to support them. We’ll always look to increase credit lines whenever the lines are being utilized and utilized properly. It’s about open lines of communication with your reseller base and making sure that they respect credit, which is a privilege, not necessarily a right. Provided that our customers treat that line and is taking care of it in a manner that we believe is good, prudent business, we’ll be supportive of that.
CDN: Any other thoughts Greg?
G.T.: The one message I’d want to leave the channel is we all talk about how tough the economy has been. But we have to look at opportunities. We’re not out of the woods yet (with the economy), but we’re very close. Around the world, the stimulus packages that were put into place are having an effect. We’ll start to see some of that into Canada in the latter part of 2009. We’re convinced that infrastructure spending will have an impact in 2010. For the resellers, have faith. It’s a changing world, but remember why we got into this business; to take care of our customers, to make a profit and to have fun and there’s still that opportunity today.